Franchise Tax Notices
Our office sends notices of specific franchise tax reporting errors as soon as the report that creates the error is processed. For reports that are filed timely, you should receive a courtesy notice before you receive a notice of delinquency, so you will have time to resolve the error.
Whether your entity received a courtesy notice, a notice from our office that its franchise tax account is delinquent, or a notice that the entity's right to transact business or registration has been forfeited, the information below should assist you in resolving the problems with the account. If you're not sure why your entity is subject to the franchise tax, please visit our Taxable Entities Frequently Asked Questions.
Section 171.256 of the Texas Tax Code requires the Comptroller to mail notice of delinquency to taxpayers who failed to meet franchise tax filing and/or payment requirements before taking other statutory collection steps. A taxable entity is delinquent if a franchise tax report was not filed, or if it was filed without the necessary information, schedules or payment, on or before the due date. Failure to satisfy franchise tax requirements will result in forfeiture of the registration of a taxable entity. (See Tax Code Sections 171.257, 171.301 and 171.3015.)
The statutory notices have a section called "Reason for Delinquency" or "Reason for Forfeiture." An account can have more than one problem. You will find an explanation for each reason, and further information about the courtesy notices, below.
Courtesy Notices
NOTICE OF INCOMPLETE TAX REPORT REASONS:
A long form report is filed with either page 1 or page 2 missing.
A tiered partnership report is filed, but no tax report is filed.
A long form report is filed with a credit taken on line 31, but no credit report is filed.
NOTICE OF MISSING INFORMATION REPORT REASONS
Notice of Franchise Tax Delinquency or Forfeiture Reasons
Original Franchise Tax Report Not Filed
Form 05-160, Texas Franchise Tax Credits Summary Schedule, Not Filed
Form 05-166, Texas Franchise Tax Affiliate Schedule, Not Filed
Form 05-175, Tiered Partnership Report, Not Filed
Form 05-175, Tiered Partnership Report, Filed Without a Tax Report
Invalid Data on Texas Franchise Tax Tiered Partnership Report, Form 05-175
Incomplete Affiliate Data on Affiliate Schedule, Form 05-166
Information about checking the entity's account status, applying for exemption, and what to do if the entity is out of business is available online.