Best CPA Austin Alternative.The May franchise report.

Texas calls the franchise tax a privilege tax. It applies to a taxable entity organized in Texas, and to one organized elsewhere that does business here. May 15 is the due date, and a weekend or holiday on the 15th gives you until the next business day. The Public Information Report, or the Ownership Information Report for entities that file that one instead, is due the same day. Your federal return and this report are filed separately.

On 2026 and 2027 reports, a company with revenue at or under 2.65 million dollars owes no franchise tax, according to the Comptroller. Above it, retailers and wholesalers pay 0.375 percent and most other businesses pay 0.75 percent. Since 2024, a company under the threshold no longer files a No Tax Due Report, but it still files the Public Information Report or the Ownership Information Report by May 15. Owners hear "no tax due" and skip that page too, and an entity that never files it can lose its right to do business in Texas.

When tax is due, it is figured on margin, which the law lets you compute in one of several ways, such as 70 percent of revenue, revenue minus cost of goods sold, revenue minus compensation, or revenue minus 1 million dollars. The rate then applies to that margin. On the call we confirm whether the report is yours and which method fits.

The rates, the threshold, and the May 15 date come from the Comptroller's franchise tax pages. If a later year changes the threshold, that page wins. We quote the work on the report after we've seen a month of your books.

The May report has nothing to do with rankings. It's a date that every entity doing business in Texas meets. It sits next to the federal return on the calendar, but it is a separate filing.

You can extend. The Comptroller's extensions page explains how. A business that doesn't pay electronically can extend to November 15, and a business required to pay electronically gets an earlier first extension, to August 15. Check the current chart for your entity, and we'll confirm which row is yours on the call.

Large electronic payments run on an earlier clock. A TEXNET payment has to be started the business day before it's due, no later than 8 in the evening, Central Time. Starting it the morning of the due date can already be late, so we start large payments the day before.

The report is only as solid as the revenue number on it. If September through December were never matched to the bank, that revenue number is a guess. We close the months first so the report uses a number that matches the bank.

Compensation and owner pay show up in the margin math and on the federal returns. A draw that was never separated from wages makes both harder. We record wages and draws in the month the money actually left, rather than sorting them out in May.

The franchise report itself never needs a signed opinion on your statements. Preparing the numbers for a report you file is work we do. A signed opinion on financial statements is work for a licensed firm, as Disclosures explains.

Have last year's franchise report handy if you kept it, plus your most recent closed month. We'll confirm whether the entity, the rate, and the date are the right questions before anyone treats May like a crisis.

A year under the threshold owes no franchise tax, and since 2024 it needs no No Tax Due Report. It still needs the information report. Skipping that page because the tax line is blank is how a forfeiture notice shows up later.

The information report lists who owns or manages the entity. We fill it in from the operating agreement you already have, and any blank line stays on the open-items list until you give us the answer.

If the entity was organized in Texas, the filing is yours. If it was organized somewhere else and does business here, the filing can still be yours. We confirm which on the call.

May 15 doesn't move for a busy week. Whatever else is on the calendar, the report's revenue number should come from months that match the bank.

Three questions come first. Was the entity organized in Texas? Does it do business here without having been organized here? Does last year's filing method still fit this year? If last year's report doesn't answer those, we find out before choosing a method.

A letter about a late report is usually a filing problem. First we look at exactly what the letter wants. If it wants the report filed, we can help with that. If it wants a signed examination of your statements, that comes from a licensed firm, as Disclosures explains.

Plenty of owners see the words no tax due and skip the filing altogether. The information report is still due, and a missing one puts the entity's standing with the state at risk. We'd rather ask in the fall, while the months can still be closed, than start a blank report in June and rebuild the revenue from memory.

The federal return and the franchise report share a season but not a form. Filing one doesn't file the other, so we track them as two separate items, and a finished federal return is never mistaken for a finished May report.