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

taxes

Franchise Tax

2021 Franchise Tax Extension Due Dates

Due to statewide inclement weather in February, the Texas Comptroller of Public Accounts automatically extended the original due date for 2021 Texas franchise tax reports to June 15, 2021.

As a reminder, the extended due dates did not change. If a taxable entity required to make its franchise tax payments by electronic funds transfer (mandatory EFT) filed for a franchise tax extension on or before June 15, the extended due date is Aug. 16. For all other taxable entities not required to make mandatory EFT payments that filed for a franchise tax extension on or before June 15, the extended due date is Nov. 15.

Other News and Announcements

Higher Than Normal Call Volume

We are experiencing higher than normal call volume. While we are available Monday through Friday, 8 a.m.-5 p.m. Central Time, shorter wait times normally occur from 8-10 a.m. and 4-5 p.m. Please have your 11-digit taxpayer number ready when you call. For additional information, see our Call Tips and Peak Schedule webpage.

Changes to Franchise Tax Nexus

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.

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.

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%
Tax Rates, Thresholds and Deduction Limits for Prior Years
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%

Due Dates

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

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

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