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Texas Taxes

Texas Franchise Tax for Reports Due On or Before December 31, 2007

Significant legislative revisions were made to the Texas franchise tax that impact the tax base and rate and extend coverage to most legal entities. These changes impact reports due on or after January 1, 2008.

View a comparison of what changed.

See the Revised Texas Franchise Tax for important information and details.

The Texas franchise tax is a privilege tax. For reports originally due prior to January 1, 2008, the tax was imposed on each corporation and limited liability company chartered/organized in Texas or doing business in Texas. The term "corporation" also included a bank, state limited banking association, savings and loan association, limited liability company, professional limited liability company, a corporation that elects to be an S corporation for federal income tax purposes and a professional corporation.

See The Texas Franchise Tax on Corporations (96-114).

Additional Franchise Tax Resources

WebChange - Change your Mailing Address/Phone Number online

Franchise Tax Credits - Specific forms, publications and other information pertaining to franchise tax credits for reports originally due before January 1, 2008

Rate Details and Other Information
(for reports originally due on or before 12/31/2007)

Rates

Greater of .25% (.0025) per year of privilege period of net taxable capital or 4.5% (.0450) of net taxable earned surplus. For the initial report, the net taxable capital rate is prorated over the initial period.

Due Date

A taxable entity's initial report is due one year and 89 days after the taxable entity's beginning date in Texas. Thereafter, annual reports are due each May 15.

Electronic Reporting

Not at this time.

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