Texas business entities (including LLCs and Corporations, and some partnerships) are primarily required to file an Annual Franchise Tax Report and an accompanying Public Information Report (PIR) or Ownership Information Report (OIR) with the Texas Comptroller of Public Accounts. These filings update the state with current information about your entity and determine your franchise tax liability. Both are due annually by May 15th.
Why is it important to file? Maintaining good standing with the State of Texas is crucial for your entity’s legal operation. Failure to comply with these filing requirements can lead to severe penalties and negative consequences, including:
Late Filing Penalty: A $50.00 penalty is assessed for each required report (Franchise Tax Report or Public Information Report/Ownership Information Report) filed after the May 15th due date, even if no tax is due.
Late Payment Penalties & Interest: If franchise tax is due and not paid by the deadline, penalties of 5% (if paid within 30 days) and an additional 10% (if paid after 30 days) of the tax due, plus interest, will be assessed.
Forfeiture of Right to Transact Business: If the Franchise Tax Report and/or Public Information Report/Ownership Information Report are not filed by the due date, your entity will receive a “Notice of Intent to Forfeit Right to Transact Business” from the Comptroller. Continued non-compliance will lead to the forfeiture of your entity’s right to transact business in Texas.
Administrative Forfeiture/Dissolution: If the forfeiture is not remedied, the Comptroller will certify the forfeiture to the Texas Secretary of State, which can lead to administrative dissolution for domestic entities or revocation of registration for foreign entities.
Loss of Personal Liability Protection: For LLCs and corporations, forfeiture can lead to the loss of personal liability protection for the owners and managers, potentially exposing personal assets to business debts and lawsuits.
Loss of Name Protection: Your entity’s name may become available for others to use.
Inability to Conduct Business: A forfeited or dissolved status can hinder your ability to legally enter into contracts, maintain bank accounts, or defend yourself in Texas courts.
Complex Reinstatement: Reinstatement is a time-consuming and often costly process, requiring the filing of all delinquent reports, payment of all accumulated fees, penalties, and taxes, plus a reinstatement fee.
Specific Requirements by Entity Type in Texas:
For Corporations (For-Profit & Professional) and Limited Liability Companies (LLCs) in Texas:
Annual Franchise Tax Report (Texas Comptroller of Public Accounts):
Frequency: Annually.
Due Date:May 15th of each year. If May 15th falls on a weekend or holiday, the due date is the next business day.
Filing Method: Filed online via WebFile through the Texas Comptroller’s website.
Franchise Tax Calculation: The tax is generally based on your Texas apportioned margin (total revenue less certain deductions).
“No Tax Due” Threshold: For Report Year 2024 (based on 2023 accounting period) and later, entities with total revenue below the “no tax due” threshold (currently $2,470,000) are generally not required to pay franchise tax.
Important Note for “No Tax Due” Entities: Even if your entity falls below the “no tax due” threshold, you are still required to file a Franchise Tax Report (as a “no tax due” report) and the accompanying Public Information Report/Ownership Information Report. (Note: As of Report Year 2024, the separate “No Tax Due Report” Form 05-163 has been discontinued; you simply file the regular Franchise Tax Report indicating no tax due.)
Extensions: Extensions to file the Franchise Tax Report are available, but generally require payment of at least 90% of the estimated tax due by the May 15th deadline to avoid late payment penalties.
Public Information Report (PIR) or Ownership Information Report (OIR) (Texas Comptroller of Public Accounts):
Frequency: Annually.
Due Date:May 15th of each year.
Filing Method: This report is filed with your Annual Franchise Tax Report.
Information Required: Current principal office address, mailing address, Registered Agent and Registered Office address, and the names and addresses of your officers, directors (for corporations), or managing members/managers (for LLCs). For entities that are not corporations or LLCs, an Ownership Information Report (OIR) is filed instead of a PIR.
Fee:$0 (no separate fee for the PIR/OIR, but the $50 late fee applies if not filed on time).
For Partnerships (General Partnerships, Limited Partnerships, Limited Liability Partnerships, Limited Liability Limited Partnerships) in Texas:
Annual Franchise Tax Report & Public/Ownership Information Report:
General Partnerships (GPs): GPs formed solely by agreement are generally not required to file an annual Franchise Tax Report or PIR/OIR with the Texas Comptroller, as they are typically not considered “taxable entities” for franchise tax purposes.
Limited Partnerships (LPs), Limited Liability Partnerships (LLPs), Limited Liability Limited Partnerships (LLLPs): These entities ARE required to file the Annual Franchise Tax Report and an Ownership Information Report (OIR) with the Texas Comptroller, similar to corporations and LLCs, and are subject to the same due dates (May 15th), filing methods, and potential penalties.
LLP Annual Renewal (Texas Secretary of State):
Domestic & Foreign Limited Liability Partnerships (LLPs): Must file an annual renewal with the Texas Secretary of State.
Due Date: Annually by the registration anniversary date.
Filing Fee:$200 per partner, with a maximum fee of $750.
Note: This is separate from the Comptroller’s filings.
For Non-Profit Corporations in Texas, please also note the following:
Texas Franchise Tax Report & Public Information Report (Texas Comptroller of Public Accounts):
General Rule: If your non-profit has received a tax exemption from the Texas Comptroller (e.g., as a 501(c)(3) federal non-profit), it is generally exempt from filing the annual Franchise Tax Report.
Required Filing for Exempt Non-Profits: While exempt from the Franchise Tax Report, most tax-exempt non-profits are still required to file a Public Information Report (PIR) with the Comptroller by May 15th each year. This report helps the state maintain up-to-date information on exempt entities.
Non-Exempt Non-Profits: If your non-profit is not exempt from franchise tax, it must file the Franchise Tax Report and PIR just like a for-profit entity.
Periodic Report of a Non-Profit Corporation (Texas Secretary of State – Form 802):
Frequency: Not annual. The Secretary of State may request a periodic report once every four years, and the request will state the due date. Most non-profits do not have an annual filing requirement with the Secretary of State directly.
General Rule: Unlike many other states, Texas does not have a broad, universal registration requirement for all charitable organizations with the Attorney General’s office simply for soliciting donations.
Specific Requirements: Registration with the Texas Attorney General’s office is generally required for:
Private Foundations: Must send a copy of their federal IRS Form 990-PF to the Attorney General’s Office at the same time it is filed with the IRS.
Organizations using professional fundraisers/telemarketers (e.g., under the Texas Law Enforcement Telephone Solicitation Act or Public Safety Solicitation Act): These organizations, and often the solicitors themselves, have specific registration, bonding, and reporting requirements with either the Attorney General’s Office or the Secretary of State.
It is crucial to verify if your non-profit falls under these specific categories.
Federal IRS Form 990 Series: As a federally tax-exempt organization, your non-profit must file an annual information return with the IRS (Form 990, 990-EZ, 990-PF, or 990-N, depending on your gross receipts and assets). This is typically due by the 15th day of the 5th month after your fiscal year ends (e.g., May 15th for a December 31st fiscal year-end).
What information is generally required for these filings? The various Texas filings typically require verification or updating of the following:
Your entity’s legal name and Texas Comptroller Taxpayer ID / Secretary of State File Number.
The current principal office mailing address.
The name and physical street address of your Texas Registered Agent.
Names and addresses of your officers, directors, managing members, or general partners.
Updated contact information for the entity.
For Franchise Tax: Revenue figures, cost of goods sold, compensation, and other deduction information to calculate margin.
For Non-Profits (if applicable): Confirmation of your federal tax-exempt status, details regarding any specific solicitation activities, and federal Form 990-PF for private foundations.
How can we assist you? We understand that navigating these compliance requirements, especially with Texas’s unique Franchise Tax and Information Report system, can be complex. We are here to assist you with understanding and fulfilling your Texas compliance obligations. Our services for these filings include:
Determining your specific filing requirements and due dates.
Gathering the necessary financial and organizational information.
Preparing and accurately filing your Annual Franchise Tax Report and Public Information Report/Ownership Information Report with the Texas Comptroller.
Assisting with any required LLP renewals with the Texas Secretary of State.
Advising on and assisting with any specific charitable solicitation registrations or filings (if applicable).
Arranging payment of the applicable fees/taxes.
Confirming receipt and good standing with the Texas Comptroller and, if applicable, the Secretary of State.
What we need from you: To facilitate these filings, fill up the information sheet:
Please do not hesitate to contact us at your earliest convenience to discuss your Texas compliance obligations. We can help ensure your entity remains in good standing and avoids any potential adverse consequences.
