Reviewed October 2026. This is general information, not tax advice for your situation.
Every LLC and corporation in Texas has a franchise tax account, even if it never owes a dollar. Most small businesses owe nothing, but they still have to file something by May 15 each year. I help business owners in Houston, Spring, Humble and Atascocita stay on top of it.
Do you owe franchise tax?
Probably not. If your business’s total revenue is at or below $2.65 million, it owes no franchise tax for its 2026 or 2027 report. If your accounting year was shorter than 12 months, the revenue is scaled up to a full year before it’s compared to the threshold.
How the numbers changed
The Comptroller adjusts the threshold and the compensation limit every two years. The 2026 and 2027 reports share the same figures.
| 2025 report (filed in 2025) | 2026 report (filed in 2026) | 2027 report (filed in 2027) | |
|---|---|---|---|
| No-tax-due threshold | $2,470,000 | $2,650,000 | $2,650,000 |
| Compensation deduction limit | $450,000 | $480,000 | $480,000 |
| EZ Computation revenue limit | $20 million | $20 million | $20 million |
| EZ Computation rate | 0.331% | 0.331% | 0.331% |
| Tax rate (retail and wholesale) | 0.375% | 0.375% | 0.375% |
| Tax rate (all others) | 0.75% | 0.75% | 0.75% |
What you still have to file
The No Tax Due Report went away starting with 2024 reports. Now you file one information report by May 15:
- Public Information Report (Form 05-102) if you’re a corporation, LLC, limited partnership, professional association or financial institution.
- Ownership Information Report (Form 05-167) if you’re any other kind of taxable entity.
You can file either one online through the Comptroller’s Webfile system. If your business is part of a combined group, each Texas member files its own report.
What happens if you skip it
- The Comptroller sends a Notice of Intent to Forfeit (Form 05-211). If it isn’t fixed, the business loses its right to do business in Texas.
- Officers and directors can be held personally responsible for business debts taken on after the forfeiture.
- The Secretary of State can then forfeit the business’s charter or registration.
- A $50 penalty: the Comptroller’s site says it’s charged on each report filed late. On the late no-tax-due reports I’ve filed, the Comptroller hasn’t been charging it, but the law allows it.
When you do owe tax
Above $2.65 million, you file a full report. A business with revenue of $20 million or less can use the EZ Computation, which is 0.331% of revenue. Otherwise the tax is figured on your margin: 0.75%, or 0.375% for retailers and wholesalers.
How I help
- I file your Public Information Report or Ownership Information Report each year so the business stays in good standing.
- I check whether you’re under the threshold, including for combined groups.
- If you’ve received a forfeiture notice, I file the missing reports and get the business current. See Texas Comptroller Notices.
Book a free 15-minute consultation.
Sources: Tex. Tax Code §§ 171.002, 171.006, 171.1016, 171.202, 171.203, 171.251, 171.255, 171.309 and 171.362; Texas Comptroller, Franchise Tax rates and thresholds; Forms 05-102, 05-167 and 05-211.
