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The Comptroller's office has amended Rule 3.586, Margin: Nexus, for franchise tax reports due on or after Jan. 1, 2020. A foreign taxable entity with no physical presence in Texas now has nexus if, during any federal accounting period ending in 2019 or later, it has gross receipts from business done in Texas of $500,000 or more.
Additionally, a foreign taxable entity with a Texas use tax permit is presumed to have nexus and is subject to Texas 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.
Franchise tax rates, thresholds and deduction limits vary by report year. Use the rate that corresponds to the year for which you are filing.
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% |
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% |
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% |
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% |
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% |
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% |
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% |
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% |
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% |
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.
Before getting a Certificate of Account Status to terminate, convert, merge or withdraw registration with the Texas Secretary of State: