Download Franchise Tax Rate

10/25/21, 8:25 PM
Franchise Tax
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 [comptroller.texas.gov/about/contact/#toll-free-label]. For
additional information, see our Call Tips and Peak Schedule [comptroller.texas.gov/taxes/file-pay/peakschedule.php] webpage.
Changes to Franchise Tax Nexus
The Comptroller's office has amended Rule 3.586, Margin: NexusExternal Link: undefined, 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 entityExternal Link: undefined
formed or organized in Texas or doing businessExternal Link: undefined in Texas. For general
information, see the Franchise Tax Overview [comptroller.texas.gov/taxes/publications/98-806.php].
https://comptroller.texas.gov/taxes/franchise/
1/5
10/25/21, 8:25 PM
Franchise Tax
Update a Franchise Tax Account
Complete the Franchise Tax Accountability Questionnaire
[comptroller.texas.gov/taxes/franchise/questionnaire.php]
Change a Business Address or Contact Information [comptroller.texas.gov/webforms/franchise/changeaddress/]
Close or Reinstate a Business [comptroller.texas.gov/taxes/franchise/reinstate-terminate.php]
Look Up Account Status [comptroller.texas.gov/taxes/franchise/coas-instructions.php]
Request a Tax Certificate or Tax Clearance Letter [comptroller.texas.gov/taxes/franchise/certificate-letterrequest.php]
File and Pay Franchise Tax
Approved Tax Preparation Software Providers [comptroller.texas.gov/taxes/franchise/approvedproviders.php]
Filing and Payment Requirements [comptroller.texas.gov/taxes/franchise/filing-requirements.php]
Request an Extension [comptroller.texas.gov/taxes/franchise/filing-extensions.php]
Report Common Owner Information [comptroller.texas.gov/taxes/franchise/common-owner.php]
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.
2020 and 2021
Item
No Tax Due Threshold
Tax Rate (retail or wholesale)
Tax Rate (other than retail or wholesale)
Compensation Deduction Limit
EZ Computation Total Revenue Threshold
EZ Computation Rate
Amount
$1,180,000
0.375%
0.75%
$390,000
$20 million
0.331%
Tax Rates, Thresholds and Deduction Limits for Prior Years
2018 and 2019
Item
No Tax Due Threshold
Tax Rate (retail or wholesale)
https://comptroller.texas.gov/taxes/franchise/
Amount
$1,130,000
0.375%
2/5
10/25/21, 8:25 PM
Tax Rate (other than retail or wholesale)
Compensation Deduction Limit
EZ Computation Total Revenue Threshold
EZ Computation Rate
Franchise Tax
0.75%
$370,000
$20 million
0.331%
2016 and 2017
Item
No Tax Due Threshold
Tax Rate (retail or wholesale)
Tax Rate (other than retail or wholesale)
Compensation Deduction Limit
EZ Computation Total Revenue Threshold
EZ Computation Rate
Amount
$1,110,000
0.375%
0.75%
$360,000
$20 million
0.331%
2015
Item
No Tax Due Threshold
Tax Rate (retail or wholesale)
Tax Rate (other than retail or wholesale)
Compensation Deduction Limit
EZ Computation Total Revenue Threshold
EZ Computation Rate
Amount
$1,080,000
0.475%
0.95%
$350,000
$10 million
0.575%
2014
Item
No Tax Due Threshold
Tax Rate (retail or wholesale)
Tax Rate (other than retail or wholesale)
Compensation Deduction Limit
EZ Computation Total Revenue Threshold
EZ Computation Rate
Amount
$1,080,000
0.4875%
0.975%
$350,000
$10 million
0.575%
2012 and 2013
Item
https://comptroller.texas.gov/taxes/franchise/
Amount
3/5
10/25/21, 8:25 PM
No Tax Due Threshold
Franchise Tax
$1,030,000
Tax Rate (retail or wholesale)
0.5%
Tax Rate (other than retail or wholesale)
1.0%
Compensation Deduction Limit
EZ Computation Total Revenue Threshold
EZ Computation Rate
$330,000
$10 million
0.575%
2010 and 2011
Item
No Tax Due Threshold
Amount
$1,000,000
Tax Rate (retail or wholesale)
0.5%
Tax Rate (other than retail or wholesale)
1.0%
Compensation Deduction Limit
EZ Computation Total Revenue Threshold
EZ Computation Rate
$320,000
$10 million
0.575%
2008 and 2009
Item
No Tax Due Threshold
Amount
$300,000
Tax Rate (retail or wholesale)
0.5%
Tax Rate (other than retail or wholesale)
1.0%
Compensation Deduction Limit
EZ Computation Total Revenue Threshold
EZ Computation Rate
$300,000
$10 million
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 StateExternal Link: undefined:
https://comptroller.texas.gov/taxes/franchise/
4/5
10/25/21, 8:25 PM
Franchise Tax
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 [comptroller.texas.gov/taxes/filepay/interest.php].
Additional Resources
Franchise Tax – Reasons We Send Courtesy or Statutory Notices
[comptroller.texas.gov/taxes/franchise/notices.php]
Franchise Tax Refunds [comptroller.texas.gov/taxes/franchise/refunds.php]
Franchise Tax Credits [comptroller.texas.gov/taxes/franchise/credits.php]
Franchise Tax Online Calculator [comptroller.texas.gov/forms/hb3calc.pdf]
Look Up NAICS CodesExternal Link: undefined
Look Up SIC CodesExternal Link: undefined
New Veteran-Owned Businesses and Texas Franchise Tax
[comptroller.texas.gov/taxes/franchise/veteran-business.php]
https://comptroller.texas.gov/taxes/franchise/
5/5