A Finish Date a named day when the company is in Texas

An envelope with no ending

The feeling this page is written for shows up as a Comptroller envelope on a cleanup that still has no last day, with someone calling the books almost current while the report asks for a figure the bank has not blessed.

The relief is a day written on the paper, with the Texas report under that day or called out as still open, so the Comptroller envelope stops sharing an unmarked pile with the untied bank.

One practice, every Texas shop

Steven Palmieri is the Tax CFO on the work, the practice itself sits in Dallas, and the company can be in the Hill Country, along the Gulf, up in the Panhandle, or anywhere in Texas outside Dallas and Fort Worth.

What travels to us is the same short list from each of those places, the oldest month that is still open, the statements from that month forward, and the day you hope the books can reach.

When the reader is in Texas and not in Dallas, we are all Texans on the video call, and we still will not claim a room in your town or a walk down your street, because the month and the day are the whole visit.

That day does not shrink because the call is remote, and it does not grow because the company happens to be in Dallas. The other pages on this site never name a state, and they stay that way for an owner whose company is somewhere else.

This page is the only one where the Texas filing is allowed to sit on the named day. If the company is not a Texas company, the yearly report page is the one that stays quiet about which state, and you can leave this page.

Who the privilege report is for

The franchise filing is Texas charging for the privilege of keeping a company alive in the state, and on our paper it is either a line under the named day or a line we leave visibly open until the oldest month can support it.

Limited liability companies and corporations are the usual filers, and that includes a company with only one owner, while a person who never formed a company at all is generally outside this report.

The Comptroller's own description, which we follow rather than shorten, treats the charge as a privilege tax on each taxable entity formed in Texas or doing business there, and Publication 98-806 is the list we open when the named day has to say whether this company files.

Before that day promises to include the report, the publication is where we look up the entity in front of us, and the filers it names include corporations, one member and series limited liability companies, banks, S corporations, partnerships, trusts, professional associations, and joint ventures.

A sole proprietorship that never became a limited liability company is generally off that list, and so is a general partnership owned only by people, unless the partnership is a limited liability partnership.

When the real question is whether this company is doing business in Texas, Publication 98-806 sends the reader to Rule 3.586, and we read that rule against the facts you bring instead of inventing a shorter test beside the named day.

May 15 is the report's own day. A weekend or a holiday pushes it to the next business day, and we confirm that shift on the Comptroller extensions page because a remembered Monday is how a named day misses the real one.

If the oldest open month will actually be tied before that date, the figures the report wants belong on the list under our day. If they will not, the paper says the report is still open and names the person who will file from the books as they stand.

The short report when the tax itself is zero

Report years 2026 and 2027 draw their no tax line at 2,650,000 dollars of yearly revenue, and revenue that stops there means the franchise tax report itself stays unfiled, which is a different sentence from the short information report.

That short report is still due unless the Comptroller has already placed the company on the skip list, and it is either Form 05-102 for public information or Form 05-167 for ownership.

Report years 2024 and 2025 used a lower no tax line, 2,470,000 dollars, and that older figure stays in its own year so it never gets pasted into a 2026 conversation about the named day.

Leaving the short report unfiled can forfeit the right to keep doing business in Texas, and the warning the Comptroller prints points at Tax Code sections 171.251, 171.2515, 171.252, and 171.255.

What forfeiture can take is the right to sue or defend in a Texas court, and it can also put certain debts on officers, directors, partners, members, or owners personally, while sections 171.259 and 171.260 keep that result off financial institutions.

A cleanup that never writes the short report onto the list is how a year with no tax becomes the year the company loses its standing while March is still being matched.

Form 05-102 is the one each Texas corporation, limited liability company, limited partnership, professional association, and financial institution signs, and an officer or another authorized person is who signs it.

Form 05-167 is the one for other taxable entities that are organized in Texas or have nexus, and the ownership information on it is confidential.

Each member of a combined group that is organized in Texas or has nexus files its own short report on the same franchise date, including a year that sits at or under the no tax line.

An exempt entity can skip both short forms, and so can an entity with neither Texas organization nor Texas nexus, a passive entity, and a qualifying new veteran owned business during its first five years, so the named day must not invent a filing those instructions already waive.

An officer who changes after you file waits for the next annual report, unless an amended report is justified by an error or a critical need, and a new registered agent is told to the Secretary of State rather than typed onto these forms.

When our named day arrives you should be able to point at that line and say the short report went in, or that it is still the open item with a person attached to it.

Which margin path the day is built for

Tax that is actually owed is figured on margin, unless the company both qualifies for the EZ computation and chooses it, and the paper should name the path before anyone treats the revenue as finished.

Publication 98-806 offers four paths and the named day has to pick one out loud, keeping 70 percent of total revenue, or removing what the goods cost, or removing compensation, or subtracting 1,000,000 dollars under the subtraction the statute has allowed since the start of 2014.

Total revenue for this purpose begins with the federal revenue figures and then removes the exclusions in Tax Code section 171.1011, and we will not type a prettier second revenue next to the one the named day made true.

Cost of goods sold, where the path allows it, is generally what it took to acquire or produce tangible personal property and real property sold in the ordinary course, and a company that only sells services often has none of that cost to claim, aside from the industry exceptions in section 171.1012.

Compensation on that third path counts W-2 wages and cash paid to officers, directors, owners, partners, and employees, including net distributive income paid to people, inside a per person cap, plus benefits the instructions allow such as workers' compensation, health care, and retirement.

The same path refuses 1099 labor and refuses the payroll taxes the employer pays, which is why the 1099 question we already ask on the national pages also decides what a Texas compensation path is allowed to count.

After the path is chosen, margin is spread to Texas by gross receipts, and a combined group has to stay on one shared method rather than letting each member invent a friendlier one.

On the 2026 and 2027 row, retail or wholesale is measured at 0.375 percent and every other trade at 0.75 percent, with a compensation cap of 480,000 dollars per person.

The 2024 and 2025 row used a compensation cap of 450,000 dollars, and that cap stays with those years.

EZ, at 0.331 percent, is available when annualized revenue stops at 20 million dollars, and taking it means giving up the margin deductions.

The long form is what remains when revenue is over the no tax line and EZ is not the choice, or when the company wants a margin deduction, and every one of those rates is a guess until the named day has revenue the bank will stand behind.

If the report is late, extended, or final

Filing the report after its due date costs a 50 dollar penalty, and the tax itself costs 5 percent more when it arrives in the first 30 days, or 10 percent more when it arrives after that.

Interest on the late tax begins on day 61, the percent is printed only on the Comptroller interest page, and we leave that percent there because the expensive miss is a report built on months our named day never reached.

An extension starts only when a payment or a Comptroller form gets there by the original due date, and the payment we would put on the list is either all of last year's tax or 90 percent of the tax this report will finally show.

A company that first became subject to the tax in the prior year cannot lean on that all of last year path for its first annual report.

When the state has not moved the company onto electronic funds transfer, the extension the named day can rely on runs out to November 15 and travels through Webfile or Form 05-164.

A company that paid 10,000 dollars or more in the previous state fiscal year is on electronic funds transfer, so its first extra date is August 15 and a second extension can run on to November 15.

A company that paid 500,000 dollars or more asks for the extension by a timely TEXNET payment under code 13080 and does not also send Form 05-164, and the clock that makes that payment timely is read on the live extensions page rather than memorized here.

If Texas nexus is ending during the cleanup, the final franchise report has to arrive within 60 days of that ending, and the extra 45 days exist only when the final report payment rules are already met, which the paper should say when the closing and the named day are the same project.

Closing the company, or ending the Texas nexus, stays your decision, and the final report plus the Secretary of State certificate of account status belong in that closing in the order the Comptroller's close or reinstate page actually prints.

Rules for a research and development credit changed for filings on and after 1 January 2026, the franchise home page is where that change is kept, and if your report will claim the credit we follow that page for the year in front of us instead of reciting a credit from memory.

Sales tax beside the bank statements

Sales tax is a second stack on a Texas company, and on this engagement it sits with the bank statements from the oldest open month rather than in a drawer nobody opens until the letter is angry.

The state piece of that tax is 6.25 percent, a city or a county or a transit district may add as much as 2 percent, and the ceiling on one sale is 8.25 percent.

A city rate stays off this page, and the sale address is read on the Comptroller rate locator the day the sale happens, because a rate carried over from last year misses the same way a Monday carried over from last May misses the franchise date.

The letter that arrives after a permit is approved is what says whether the return is monthly or quarterly, and that letter belongs in the same stack as those oldest statements.

A monthly return is due on the 20th of the month after the one it covers, the Comptroller's own April example lands on May 20, and a weekend or a holiday moves that day to the next working day.

Quarterly filers meet April, July, October, and January, a yearly filer reports the prior year on January 20, and if our named day will not reach those months in time the sales tax return is left open on the paper the same way the franchise report is.

A seller who both reports and pays on time may keep a discount of half a percent of the tax, and a seller who pays early may keep that half percent plus another 1.25 percent for paying ahead.

A sales tax report that misses its day costs 50 dollars, then another 5 percent of the tax inside the first 30 days and 10 percent after that, with interest beginning on day 61 and the percent again left on the Comptroller interest page.

A buyer who really will resell the item hands over Form 01-339, and a permit number typed into a message is not that form, because the completed form is the evidence the seller has to keep.

Sales a marketplace made are still Texas sales. They are counted in total Texas sales and taken back out of taxable sales when the marketplace agreed in its terms to collect, and that agreement can live in terms the seller already accepted, with no extra form, while both sides remain open to an audit so the records stay.

A remote seller under 500,000 dollars of Texas revenue across the prior 12 months is inside the safe harbor and does not have to take a permit or collect use tax, and marketplace sales count toward that 500,000 dollars even when the marketplace is the one collecting.

A remote seller who sells only through a marketplace, and who took that collection agreement in good faith, can skip the permit and must still keep the records at least four years, which is the same four years every seller keeps for gross receipts.

Someone who lives in Texas and sells only through a marketplace still needs the permit, because a Texas seller has physical presence, while inventory that only pauses in a marketplace warehouse in Texas does not by itself force a permit when the seller is under the harbor and the provider agreed to collect.

Cross that harbor and the seller takes the permit and collects, and a taxable entity storing inventory that way still has the franchise report to put on the named day's list.

Form 01-799 is the single local use tax return for a remote seller, the FAQ currently states that add-on at 1.75 percent, and the FAQ on the day you file wins because the Comptroller recomputes it.

A marketplace provider does not get to use that single local rate. A large sales tax payment sent by TEXNET has its own clock on the Comptroller page, a letter arrives when a business crosses the electronic pay line, and we read that letter with you instead of guessing the clock.

What the call has to leave you holding

Bring the oldest open month, the day you need, and the Comptroller letter if one is already in the stack, and we will say whether that day can carry the franchise report and the sales tax months or whether one of them has to be named as still open.

The fee is written on that same paper after the day and the list, and this page is not where a price appears.

If the months turn out to be few and already matched, we will say the cleanup is unnecessary, even though the Texas reports can still come due on their own calendar, because a day invented only so the engagement looks busy is not a day we will name.

You should leave the call holding a start month, a day, and a list that either includes the report or admits it is open, so a later argument goes back to the paper instead of back to a memory of the call.