Texas Franchise Tax Revisions -- What changed?
Old Law
Effective for reports originally due on or before 12/31/2007Taxable 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 01/01/2008Taxable 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