Texas Comptroller of Public Accounts

Texas Comptroller of Public Accounts, Glenn Hegar

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Texas Franchise Tax Revisions — What changed?

Old Law
Effective for reports originally due on or before 12/31/2007

Taxable Entities

  • Corporations
  • Limited Liability Companies

Due Date

  • Initial Reports: one year and 89 days after beginning date
  • Annual Reports: May 15

Accounting Period

Annual Report – begins with the day after the ending date on the previous franchise tax report and ends with the last accounting period ending date for federal income tax purposes in the year before the year the report is originally due.

Rate

  • 0.25% (.0025) per year of privilege period of net taxable capital, or
  • 4.5% (.0450) of net taxable earned surplus.
  • .

Tax Base

Taxable Capital and Earned Surplus

Revised Law
Generally, effective for reports originally due on or after 01/01/2008

Taxable Entities

  • Corporations
  • Limited Liability Companies
  • Partnerships (with exceptions)
  • Professional Associations
  • Joint Ventures
  • Business Trusts
  • Other legal entities

Due Date

No Change

Accounting Period

No Change

Rate

  • 1.0% (.01) for most
  • 0.5% (.005) for entities primarily engaged in retail or wholesale trades; or
  • E-Z rate of 0.575% (.00575) for qualifying entities

Tax Base

Margin

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