Texas franchise tax: the May 15 report every LLC still has to file

Texas has no personal income tax, but every LLC and corporation registered here has a franchise tax filing due in May. Most small companies owe nothing and still have to file something.

What changed for 2026

Two things matter for a small company. The no-tax-due threshold is adjusted for inflation, and for the 2026 report year it stands at $2,650,000 of annualized total revenue. Below that, no franchise tax is due.

The second change is older but still catches people. For the 2024 report year and later, an entity whose annualized total revenue is at or below the threshold is no longer required to file a No Tax Due Report at all. That form is gone, which is why searching for it turns up confusing results. What has not gone away is the information report described below, and an entity that files nothing because it read "no tax due" as "no filing" is the one that ends up in trouble.

Who is subject

The tax reaches each taxable entity formed or organized in Texas, and each entity doing business in Texas whatever state it was formed in. In practice that means limited liability companies, corporations, S corporations, professional associations, limited partnerships and most other registered entities.

A sole proprietor who never formed an entity is generally outside it. That is the trade-off nobody mentions when an LLC gets set up for a side business: the entity brings a state filing that the sole proprietorship did not have.

Below the threshold, you still file

This is the section that matters most, because it is where nearly every new Houston LLC sits. Annualized total revenue at or below the no-tax-due threshold means no franchise tax is owed, and the entity instead files an information report: Form 05-102, the Public Information Report, or Form 05-167, the Ownership Information Report, depending on the entity type.

The information report is not a tax return. It is the state's record of who runs and owns the company, and it is the filing the Comptroller expects from a company with nothing to pay.

The date

The annual report is due May 15, 2026. If that date falls on a weekend or a holiday, the due date moves to the next business day.

Above the threshold

An entity over the threshold files one of two reports. The EZ Computation Report is available to entities with annualized total revenue at or below $20,000,000, and it trades simplicity for money: it cannot claim the deductions or credits the long form allows. Everything else uses the Long Form, where the taxable margin is worked out and the rate applied.

Your first year

A company formed part way through a year does not have a report period that starts in January, and the first report is the one new owners most often miss. The safest move is not to reason it out: sign in to the entity's account with the Comptroller and take the due date, the report year and the report type from what the state has on file for your entity.

What forfeiture costs

An entity that does not file can lose its right to transact business in Texas. That is the plain consequence, and it is worse than it sounds, because the liability protection that was the whole point of forming the company travels with that right.

If you are unsure where your company stands, its status sits in the Comptroller's account for the entity, alongside the due date.

How to file

Webfile is the Comptroller's secure reporting and payment portal, and it handles both the reports and the money. Smaller franchise tax payments can go by electronic funds transfer or by card; larger payers are directed to electronic funds transfer. Before you start, have the entity's taxpayer number and its Webfile number, the revenue figure for the accounting period, and the officer, director or ownership details the information report asks for.

What this is not

It is not a Texas income tax, and it is not a substitute for anything federal. The franchise tax is a state filing based on revenue; your federal return is separate and unaffected by it. Profit from the business still reaches your Form 1040 through a Schedule C, a partnership return or an S corporation return, depending on how the entity is treated. S corporation or sole proprietor is where that choice gets made.