FREQUENTLY ASKED QUESTIONS:
Who must file? All taxable entities formed or organized in Texas or doing business in Texas must file a franchise tax form with the state. The due date for Texas Franchise reports for the 2013 tax year is May 15, 2014.
Who owes taxes? Most entities will file a no tax due form. An entity may file a no tax due form if it meets on of the following criteria:has zero Texas receipts,qualifies as a passive entity under TTC 171.0003,is a real estate investment trust (REIT) that meets the qualifications specified in TTC171.0002(c)(4), orhas total revenue, annualized per 12-month period on which the tax is based, below the no-tax-due threshold amount. All other entitles must calculate their taxes due.
What is the no- tax- due threshold? The amount of the no-tax-due threshold, per 12-month period on which the margin is based, is outlined below. If your business is below the threshold then no tax is due,however, you must still file the no tax due form.
The current tax thresholds are as follows:
$1,080,000 for franchise tax reports originally due on or after January 1, 2014 and before January 1, 2015. (Note: The no-tax-due threshold of $1,000,000 has been adjusted for the increase in the Consumer Price Index (CPI) as required by TTC Section 171.006. )
$1,030,000 for franchise tax reports originally due on or after January 1, 2012 and before January 1, 2014
$1,000,000 for franchise tax reports orginally due on or after January 1, 2010 and before January 1, 2012.
$300,000 for franchise tax reports originally due on or after January 1, 2008 and before January 1, 2010.
The no-tax-due threshold is scheduled to be $600,000 (not including any CPI adjustments) for reports due on or after January 1, 2014.
Special notes: A copy of your franchise tax report does not have to be included with your Federal tax returns. Quarterly estimated tax reporting is not required for state franchise taxes in Texas. Additionally, a retail or wholesale entity may qualify for a lower franchise tax rate.
For more information contact the Texas State Comptroller. We recommend consulting your financial advisor, CPA, or tax attorney prior to filing.
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