Natural person means a human being or the estate of a human being. The term does not include a purely legal entity given recognition as the possessor of rights, privileges and responsibilities, such as a corporation, limited liability company, partnership or trust. Texas Tax Code (TTC) 171.0001(11-a).
A family limited partnership is a taxable entity unless it meets the criteria of a passive entity under TTC 171.0003.
A sole proprietorship that is not legally organized in a manner that limits its liability is not a taxable entity. A single-member limited liability company filing as a sole proprietor for federal income tax purposes is a taxable entity. TTC 171.0002(d).
Yes. A royalty interest in an oil or gas well is considered an interest in real property. Therefore, a non-Texas entity that owns a royalty interest in an oil or gas well in Texas is considered to own real property in Texas and is subject to the franchise tax unless it is a nontaxable entity.
Yes. The legal formation of an entity – not an entity's treatment for federal income tax purposes – determines filing responsibility for Texas franchise tax. Therefore, each taxable entity that is organized in Texas or doing business in Texas is subject to franchise tax, even if it is treated as a disregarded entity for federal income tax purposes and is required to file a franchise tax report. If the entity files as a member of a combined group, the reporting entity may include the disregarded entity with the parent's information; in that event, both the disregarded entity and its parent are presumed to have nexus.
Yes, unless the grantor trust qualifies as a passive entity or as a nontaxable entity under TTC 171.0002(c)(1). This subsection states that a grantor trust qualifies as a nontaxable entity if:
A series LLC is treated as a single legal entity. It pays one filing fee and registers as one entity with the Texas Secretary of State. It files one franchise tax report and one Public Information Report as a single entity, not as a combined group, under its Texas taxpayer identification number. If one of the series has nexus in Texas, the entire series LLC has nexus in Texas.