Texas has no personal income tax, so the CPA’s focus is the franchise (margin) tax and the accompanying information reports. Recent changes raised the filing threshold sharply, removing many small entities from the tax — though they still have a filing obligation.
Texas Tax Deadlines at a Glance (2026)
Requirement | Applies To | Due Date |
|---|---|---|
Franchise (margin) tax report | Entities above threshold | May 15, 2026 |
Public Information Report (PIR) | Corporations, LLCs | May 15, 2026 |
Ownership Information Report (OIR) | Other entity types | May 15, 2026 |
Extended franchise report | On timely extension | November 15, 2026 |
The $2.65 Million No-Tax-Due Threshold
For 2026, an entity with annualized total revenue at or below $2,650,000 owes no franchise tax. Critically, the standalone No Tax Due Report was discontinued for reports due on or after January 1, 2024 — but below-threshold entities must still file a Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167). Skipping the information report because no tax is due is a common and penalized mistake.
Franchise Tax Rates
Retail or wholesale businesses: 0.375%
All other businesses: 0.75%
E-Z Computation rate: 0.331%, available to entities with annualized revenue of $20 million or less
Extensions and Exempt Entities
An extension (Form 05-164) moves the report to November 15, 2026, but the extension payment must be at least 90% of the tax that will be due, or 100% of the prior year’s tax. Some entities are outside the franchise tax entirely: sole proprietorships (except single-member LLCs) and general partnerships owned entirely by natural persons generally do not file.
Sales Tax and Penalties
Sales-tax filers are assigned monthly, quarterly, or yearly frequencies; monthly returns are due the 20th of the following month. Franchise-tax late penalties run 5% (1–30 days late) or 10% (over 30 days), plus a $50 penalty per late report even when no tax is owed. Interest begins on the 61st day after the due date.
CPA Action Steps
File the PIR or OIR even for below-threshold clients — no tax due does not mean no filing
Confirm the correct rate (retail/wholesale 0.375% vs 0.75%) and EZ eligibility
Meet the 90%/100% payment rule if extending to November 15
Track sales-tax frequency separately from the annual franchise report
Verify the current no-tax-due threshold and rates against the Texas Comptroller (comptroller.texas.gov) before filing.