Para qué sirve el formulario
Texas Form 05-158, the Texas Franchise Tax Report (also known as the "Long Form"), is used by businesses to report and pay the state's franchise tax—a privilege tax imposed on entities that are formed in Texas or doing business in Texas. The franchise tax is based on a company's taxable margin, which can be calculated using various methods depending on the business type and revenue level.
Entities required to file include corporations, limited liability companies (LLCs), partnerships, banks, professional associations, trusts, joint ventures, and most other legal business entities. Notable exceptions include sole proprietorships (unless they're single-member LLCs), general partnerships composed entirely of natural persons, and certain exempt nonprofit organizations that have received formal exemption approval from the Texas Comptroller.
Form 05-158 consists of two pages:
Form Structure
- Page 1 (Form 05-158-A) collects revenue, cost of goods sold, compensation, and apportionment information
- Page 2 (Form 05-158-B) calculates the actual tax due
Required Supporting Reports
- Form 05-102 (Public Information Report) for corporations, LLCs, limited partnerships, professional associations, and financial institutions
- Form 05-167 (Ownership Information Report) for trusts, associations, and other entity types
Starting with reports due in 2024, businesses with annualized total revenue at or below $2,470,000 (the "no tax due threshold") are no longer required to file a franchise tax report, though they must still file the appropriate information report annually.
Cuándo se utiliza
Regular Annual Filing
Most businesses file Form 05-158 annually by May 15 each year (or the next business day if May 15 falls on a weekend or holiday). The report covers the entity's last accounting period end date for federal income tax purposes in the year before the report is due.
Late Filing
If you miss the May 15 deadline:
- $50 penalty applies for late filing
- 5% penalty if tax is 1–30 days late
- 10% penalty if over 30 days late
- Interest begins accruing after 61 days
Failure to file can result in forfeiture of the right to conduct business in Texas.
Amended Filing
You may file an amended Form 05-158 to:
- Correct mathematical errors
- Change margin calculation method
- Claim refunds
- Fix reporting mistakes
Final Reporting
- Entities terminating, merging, or converting must file a final report marked “FINAL”
- Out-of-state entities must file within 60 days of ending Texas nexus
Key Rules or Details for 2025
Revenue Thresholds
- $2,470,000 (2024–2025 threshold)
- $2,650,000 (2026–2027 threshold)
- If tax due is under $1,000 → no payment required
Margin Calculation Methods
Choose the lowest result:
- Total revenue × 70%
- Total revenue – cost of goods sold
- Total revenue – compensation
- Total revenue – $1 million
Tax Rates
- 0.75% for most businesses
- 0.375% for retail/wholesale
Compensation Deduction Limits
- $450,000 per individual (2024–2025)
- Includes W-2 wages and benefits
- Excludes 1099 payments and payroll taxes
Combined Reporting
- Required for affiliated entities in a unitary business
- All members must use the same calculation method
Métodos de presentación
- Webfile (preferred)
- TEXNET required for large taxpayers ($500,000+)
- Other options: check, credit card, EFT
Paso a paso (visión general)
Step 1 – Gather Financial Information
- Federal tax return
- Gross receipts
- COGS data
- Compensation records
- Tax credits
Step 2 – Complete Revenue Section (Page 1)
- Enter income sources
- Calculate total revenue
- Apply exclusions
Step 3 – Calculate Cost of Goods Sold (If Applicable)
- Enter COGS
- Remove non-allowable costs
- Determine net COGS
Step 4 – Calculate Compensation Deduction (If Applicable)
- Include wages and benefits
- Apply $450,000 cap per individual
Step 5 – Determine Your Margin
- Compare all four methods
- Select the lowest taxable margin
Step 6 – Apportion to Texas
- Texas receipts ÷ total receipts
- Apply percentage to margin
Step 7 – Calculate Tax (Page 2)
- Apply correct tax rate
- Subtract credits
- Determine final liability
Step 8 – File Information Report
- Form 05-102 or 05-167 depending on entity
Step 9 – Submit Everything
- File via Webfile or mail
- Include payment if applicable
- Keep records
Errores comunes y cómo evitarlos
Missing Pages or Schedules
- Ensure both pages are submitted
- Include required forms (05-160, 05-166 if applicable)
Incorrect Accounting Period
- Match federal tax return period
- Verify reporting year
Not Annualizing Short-Period Revenue
- Use formula:
(Revenue ÷ Days) × 365
Exceeding Compensation Limits
- Apply $450,000 cap per person
Filing the Wrong Information Report
- Match entity type to correct form
Ignoring Combined Reporting Rules
- Determine if affiliated group rules apply
Missing Extension Deadline
- File extension before May 15
- Pay estimated tax with request
¿Qué ocurre después de presentar la solicitud?
Immediate Processing
- Webfile = instant confirmation
- Paper filing = several weeks
Account Updates
- Filing updates compliance status
- Needed for business transactions
Public Information Reporting
- Form 05-102 becomes public record
- Form 05-167 remains confidential
Assessment and Notices
- Errors trigger notices (e.g., 05-211, 05-212)
Audit Potential
- Reviews typically cover 3–4 years
- Focus on margin, sourcing, deductions
Refunds
- Claims allowed within 4 years
- Processing may take months
Certificate Access
- Certificate of Account Status available once compliant
Preguntas frecuentes
Do I need to file if my business made no money or had losses?
Yes, unless your annualized total revenue is at or below the no tax due threshold ($2,470,000 for 2024–2025), you must file Form 05-158 even if you had losses or no revenue. Businesses with zero Texas gross receipts must still file the long form to report their total revenue and show zero on the Texas gross receipts line. You’ll also need to file the appropriate information report to maintain active status.
Can I file quarterly estimated franchise tax payments?
No. Texas does not require or accept quarterly estimated franchise tax payments. The franchise tax is due once annually on May 15 based on your previous year’s financial data.
What if I’m part of a combined group but received a notice?
Do not file separately. Contact the reporting entity to ensure proper filing. The issue usually resolves once the combined report is correctly submitted.
How do I choose the best margin calculation method?
You must use the method that results in the lowest taxable margin. Most businesses calculate all four options and select the smallest value.
Can I change my accounting year end?
Yes, but only by first changing it with the IRS. Your Texas reporting must match your federal accounting period.
What if I filed separately but should have filed as a combined group?
Submit a correction letter to the Comptroller and coordinate with the reporting entity to file an amended combined report.
Do nonprofits still need to file?
Only if exemption is not yet approved. Once approved, filing is no longer required, and exemptions may apply retroactively.
