Texas Franchise Tax No Tax Due Threshold for 2026

For Texas franchise tax reports due in 2026 and 2027, the no tax due threshold is $2,650,000 in annualized total revenue. If your business is at or below it, you owe no franchise tax and don't file a franchise tax report, but you still must file a Public Information Report or Ownership Information Report by the May 15 due date (May 17 in 2027, because May 15 falls on a Saturday).

$2.65 millionThe Texas no tax due threshold is $2.65 million in annualized total revenue for franchise tax reports due in 2026 and 2027.
$2.47 millionThreshold for 2024 and 2025 reports: $2.47 million.
0.375%The tax rate is 0.375% for retail or wholesale businesses and 0.75% for most others, applied to taxable margin.
0.75%The tax rate is 0.375% for retail or wholesale businesses and 0.75% for most others, applied to taxable margin.

The Texas no tax due threshold is $2.65 million in annualized total revenue for franchise tax reports due in 2026 and 2027. That's according to the Texas Comptroller. If your business's annualized total revenue is at or below that amount, it owes no franchise tax. Since the 2024 report year, businesses at or under the threshold no longer file a No Tax Due Report. They still file an information report every year: Form 05-102 (Public Information Report) or Form 05-167 (Ownership Information Report). Reports are due May 15, or the next business day if May 15 falls on a weekend or holiday, so the 2027 due date is Monday, May 17.

Last checked: November 1, 2026. This page explains the rules only. It is general information, not legal, tax, or financial advice.

The short version

Threshold for 2026 and 2027 reports: $2.65 million in annualized total revenue.
Threshold for 2024 and 2025 reports: $2.47 million.
At or below the threshold: no tax is owed and no franchise tax report is filed, but an information report is still required.
Above the threshold: you file a franchise tax report (the EZ Computation Report or the Long Form). The tax rate is 0.375% for retail or wholesale businesses and 0.75% for most others, applied to taxable margin.
Due date: May 15 each year, or the next business day if May 15 falls on a weekend or holiday. In 2027 that is Monday, May 17.
The No Tax Due Report (Form 05-163) is discontinued for the 2024 report year and later.

Who qualifies

The franchise tax applies to taxable entities formed in Texas or doing business in Texas.
Taxable entities include corporations, LLCs (including single-member LLCs) and S corporations.
They also include partnerships (general, limited and limited liability), professional associations and other legal entities.
An entity is at or under the no tax due threshold when its annualized total revenue is at or below the threshold for the report year.
For a combined group, the test uses the group's total annualized revenue.
Each combined group member formed in Texas or with nexus in Texas still files its own information report.
Some businesses aren't subject to franchise tax at all.
Sole proprietorships (other than single-member LLCs).
General partnerships owned directly.
Entirely by natural persons.

How annualized revenue works

The threshold test uses annualized total revenue. If the accounting period your report is based on is not 12 months long, the Comptroller says to divide total revenue by the number of days in the period and multiply by 365. Total revenue starts with the revenue reported for federal income tax, minus certain exclusions in Texas law. The Comptroller's Franchise Tax Online Calculator can annualize revenue for you.

How to get it

How to get started

Find your total revenue for the accounting period your report is based on, and annualize it if the period isn't 12 months.
Compare it to the threshold for the report year you're filing. Use the threshold for that report year, not the calendar year you're in.
If you're at or below the threshold, file only Form 05-102 (Public Information Report) or Form 05-167 (Ownership Information Report), whichever fits your entity type.
If you're above the threshold, file the EZ Computation Report or the Long Form, plus the information report, and pay any tax due.
File by May 15 (May 17 in 2027), or request an extension from the Comptroller on or before the due date.
Keep your account current. An account that isn't current can lead to a notice of intent to forfeit and then forfeiture of your right to transact business in Texas.

Programs that may match

Look beyond franchise tax

Texas incentivessee Texas small business grants and incentives.Research spendingTexas now has a Research and Development Activities Credit for franchise tax reports originally due on or after Jan. 1, 2026. Federal options are covered in our R&D payroll tax credit guide.Federal changessee what the One Big Beautiful Bill changed for small business taxes.See which of FundPlenty's 1,700+ programs may fit your business with the free match at fundplenty.com.

FAQ

What is the Texas franchise tax no tax due threshold for 2026?

$2,650,000 in annualized total revenue. The same threshold applies to reports due in 2027.

Do I still have to file anything if I'm under the threshold?

Yes. You don't file a franchise tax report, but you must file a Public Information Report (Form 05-102) or an Ownership Information Report (Form 05-167) each year.

What if my tax due is less than $1,000?

If your revenue is above the threshold but the computed tax is under $1,000, you don't owe tax. The Comptroller says you still file the franchise tax report and the information report.

When is the Texas franchise tax report due?

May 15 each year. If May 15 falls on a Saturday, Sunday or legal holiday, it's due the next business day. May 15, 2027 is a Saturday, so 2027 reports are due Monday, May 17, 2027.

Is there a penalty for filing late if I owe no tax?

It depends on what you file. If you're above the threshold, the Comptroller charges a $50 penalty for a franchise tax report filed after the due date, even if no tax is due with that report.

If you're at or below the threshold and only file a Public Information Report or Ownership Information Report, the Comptroller says there is no $50 penalty for filing it late. But if it isn't filed, your account isn't current, which can lead to forfeiture of your right to transact business in Texas.

Who can use the EZ Computation Report?

An entity or combined group with annualized total revenue of $20 million or less. If you use it, you can't take margin deductions or franchise tax credits.