Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
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Glenn Hegar
Texas Comptroller of Public Accounts
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taxes

Franchise Tax

News and Announcements

Acting Governor Issues Hurricane Beryl Disaster Declaration

Acting Gov. Dan Patrick issued a disaster proclamation as Hurricane Beryl poses a threat of widespread and severe property damage, injury and loss of life. See our Disaster Relief Information webpage for more information.

Franchise Tax Due Date is May 15th
Notice: New Filing Requirements for 2024

The no tax due threshold is increased to $2.47 million and certain filing requirements are eliminated. Read more.

High Call Volume

Shorter wait times occur from 8-10 a.m. and 4-5 p.m. CST. Please have your 11-digit taxpayer number ready when you call. For more information, see our Call Tips and Peak Schedule.

What is Franchise Tax?

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.

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.

2024 and 2025
Item Amount
No Tax Due Threshold $2,470,000
Tax Rate (retail or wholesale) 0.375%
Tax Rate (other than retail or wholesale) 0.75%
Compensation Deduction Limit $450,000
EZ Computation Total Revenue Threshold $20 million
EZ Computation Rate 0.331%
Tax Rates, Thresholds and Deduction Limits for Prior Years
2022 and 2023
Item Amount
No Tax Due Threshold $1,230,000
Tax Rate (retail or wholesale) 0.375%
Tax Rate (other than retail or wholesale) 0.75%
Compensation Deduction Limit $400,000
EZ Computation Total Revenue Threshold $20 million
EZ Computation Rate 0.331%
2020 and 2021
Item Amount
No Tax Due Threshold $1,180,000
Tax Rate (retail or wholesale) 0.375%
Tax Rate (other than retail or wholesale) 0.75%
Compensation Deduction Limit $390,000
EZ Computation Total Revenue Threshold $20 million
EZ Computation Rate 0.331%
2018 and 2019
Item Amount
No Tax Due Threshold $1,130,000
Tax Rate (retail or wholesale) 0.375%
Tax Rate (other than retail or wholesale) 0.75%
Compensation Deduction Limit $370,000
EZ Computation Total Revenue Threshold $20 million
EZ Computation Rate 0.331%
2016 and 2017
Item Amount
No Tax Due Threshold $1,110,000
Tax Rate (retail or wholesale) 0.375%
Tax Rate (other than retail or wholesale) 0.75%
Compensation Deduction Limit $360,000
EZ Computation Total Revenue Threshold $20 million
EZ Computation Rate 0.331%
2015
Item Amount
No Tax Due Threshold $1,080,000
Tax Rate (retail or wholesale) 0.475%
Tax Rate (other than retail or wholesale) 0.95%
Compensation Deduction Limit $350,000
EZ Computation Total Revenue Threshold $10 million
EZ Computation Rate 0.575%
2014
Item Amount
No Tax Due Threshold $1,080,000
Tax Rate (retail or wholesale) 0.4875%
Tax Rate (other than retail or wholesale) 0.975%
Compensation Deduction Limit $350,000
EZ Computation Total Revenue Threshold $10 million
EZ Computation Rate 0.575%
2012 and 2013
Item Amount
No Tax Due Threshold $1,030,000
Tax Rate (retail or wholesale) 0.5%
Tax Rate (other than retail or wholesale) 1.0%
Compensation Deduction Limit $330,000
EZ Computation Total Revenue Threshold $10 million
EZ Computation Rate 0.575%
2010 and 2011
Item Amount
No Tax Due Threshold $1,000,000
Tax Rate (retail or wholesale) 0.5%
Tax Rate (other than retail or wholesale) 1.0%
Compensation Deduction Limit $320,000
EZ Computation Total Revenue Threshold $10 million
EZ Computation Rate 0.575%
2008 and 2009
Item Amount
No Tax Due Threshold $300,000
Tax Rate (retail or wholesale) 0.5%
Tax Rate (other than retail or wholesale) 1.0%
Compensation Deduction Limit $300,000
EZ Computation Total Revenue Threshold $10 million
EZ Computation Rate 0.575%

Final Franchise Tax Reports

Before getting a Certificate of Account Status to terminate, convert, merge or withdraw registration with the Texas Secretary of State:

  • A Texas entity, terminating, converting or merging, must file its final tax report and pay any amount due in the year it plans to terminate, convert or merge.
  • An out-of-state entity, ending its nexus in Texas, must file its final report and pay any amount due within 60 days of ceasing to have nexus.

Penalties and Interest

Penalties
  • 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.
Interest
  • Past due taxes are charged interest beginning 61 days after the due date.
  • To calculate interest on past due taxes, visit Interest Owed and Earned.

Additional Resources