The Texas franchise tax is a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. For general information, see the Franchise Tax Overview.
Wolters Kluwer, the maker of CCH tax reporting software, suffered an outage of services used by taxpayers to file the Texas Franchise tax report. We will automatically waive penalties for taxpayers affected by the outage who file and pay by May 22. This is a penalty waiver only and not an extension of the due date. For a valid extension, taxpayers must file an extension request and make the associated payment by May 15. Without a valid extension, the statute of limitation will be based on the May 15 due date.
Update a Franchise Tax Account
File and Pay Franchise Tax
Tax Rates, Thresholds and Deduction Limits
Franchise tax rates, thresholds and deduction limits vary by report year. Use the rate that corresponds to the year for which you are filing.
Annual Franchise Tax Reports
The annual franchise tax report is due May 15. If May 15 falls on a weekend or holiday, the due date will be the next business day.
Final Franchise Tax Reports
A Texas entity must file and pay its final franchise tax report in the year it plans to terminate, merge or withdraw with the Texas Secretary of State’s office. For out-of-state entities, the final report must be filed and paid within 60 days of that entity ceasing to have nexus in Texas. The final franchise tax report must be filed before the entity can get a Certificate of Account Status to terminate, merge or withdraw.
Penalties and Interest
- A $50 penalty is assessed on each report filed after the due date.
- If tax is paid 1-30 days after the due date, a 5 percent penalty is assessed.
- If tax is paid over 30 days after the due date, a 10 percent penalty is assessed.