What Form 05-158 Is For
Form 05-158, officially titled the Texas Franchise Tax Report, consists of two pages (Forms 05-158-A and 05-158-B) and is commonly called the "Long Form" in franchise tax parlance. This form serves as the primary tax return for calculating the Texas franchise tax, which is a privilege tax imposed on businesses formed in Texas or doing business in the state.
The Texas franchise tax isn't based on your business profits like federal income tax. Instead, it taxes your business "margin"—essentially a measure of your revenue minus certain allowable deductions. The Form 05-158 walks you through calculating this margin, applying the appropriate tax rate, claiming any credits you qualify for, and determining your final tax liability.
You'll use Form 05-158 when your business doesn't qualify for the simpler EZ Computation Report (Form 05-169). Generally, this means either your annualized total revenue exceeds $20 million, or you've chosen to use the Long Form to take advantage of specific deductions like cost of goods sold or compensation that aren't available with the EZ Computation method. Certain entity types—including passive entities, Real Estate Investment Trusts (REITs), and entities with zero Texas gross receipts—may also use this form by marking the appropriate designation and completing only the taxpayer information section.
The form captures critical financial information including your total revenue, chosen margin calculation method, apportionment factors showing what portion of your business is attributable to Texas, any available credits, and ultimately your tax liability. Most businesses must also file an accompanying Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167) with their franchise tax return.
When You’d Use Form 05-158
Late Filings
The standard filing deadline for Form 05-158 annual reports is May 15 each year. When this date falls on a weekend or legal holiday, the deadline shifts to the next business day. Your report covers an accounting period that typically aligns with your federal income tax year—generally the period ending in the previous calendar year.
If you miss the original May 15 deadline, you'll need to file a late return. Texas doesn't take lateness lightly: even if you don't owe any tax, filing late triggers an automatic $50 late filing penalty. Beyond this fixed penalty, the state assesses percentage-based penalties on any unpaid tax.
- 1–30 days late → 5 percent penalty
- More than 30 days late → 10 percent penalty
- Interest begins accruing after 61 days
Extensiones
Extensions provide breathing room if you need more time.
- File request by May 15
- Pay either:
- 90% of current year tax, or
- 100% of prior year tax
Most entities receive an extension to November 15. EFT payers may get an August 15 extension, with a possible second extension to November.
Declaraciones rectificativas
You can file an amended Form 05-158 to:
- Correct math errors
- Change margin calculation method
- Add missed deductions
- Claim a refund
You generally have four years from the original due date to claim refunds.
Key Rules or Details for This Tax Year
No Tax Due Threshold
For report years 2024 and later:
- $2,470,000 threshold (2024–2025)
- $2,650,000 threshold (2026–2027)
Entities below the threshold:
- Do NOT file a franchise tax report
- MUST still file an information report
Minimum Tax Rule
- If tax owed is under $1,000 → file, but no payment required
Margin Calculation Options
You must choose ONE:
- 70% of total revenue
- Revenue minus cost of goods sold
- Revenue minus compensation
- Revenue minus $1 million
Tax Rates
- Retail/Wholesale: 0.375%
- Other entities: 0.75%
Apportionment
Texas uses a single-factor formula:
- Texas receipts ÷ total receipts
Filing Requirements
- Electronic filing required
- EFT required if prior tax ≥ $10,000
Combined Groups
If entities are part of a unitary business:
- Must file as a combined group
- Additional forms required:
- Form 05-166
- Form 05-177
Paso a paso (visión general)
1. Gather Financial Records
- Federal tax return
- Gross receipts data
- Deduction documentation
- Credit documentation
2. Complete Taxpayer Information
- Texas taxpayer number
- Business name
- Filing type (annual or final)
3. Calculate Total Revenue
- Start with federal revenue
- Subtract Texas-specific exclusions
- Annualize if needed
4. Choose Margin Method
Select the lowest result among the four options and document it properly.
5. Calculate Apportionment
- Texas receipts ÷ total receipts
- Multiply by margin
6. Apply Tax Rate
- Use appropriate rate
- Subtract credits
7. Finalize Tax Liability
- Compare against $1,000 threshold
8. Complete Additional Form Sections
- Revenue breakdowns
- Officer details
- Signature
9. File Required Information Report
- Form 05-102 or
- Form 05-167
Errores comunes y cómo evitarlos
Threshold Misunderstanding
- Not annualizing revenue correctly
- Filing when only an info report is required
Margin Calculation Errors
- Mixing deduction methods
- Using incorrect COGS
- Ignoring compensation caps
Apportionment Errors
- Using incorrect Texas receipts
- Miscalculating denominator
Filing Status Issues
- Incorrect combined group reporting
Extension Payment Errors
- Paying less than required 90%
Missing Information Reports
- Not filing PIR or OIR
- Triggering separate penalties
¿Qué ocurre después de presentar la solicitud?
Processing
- Immediate confirmation (electronic)
- Validation checks
- Review by Comptroller
Account Status
- Certificate issued if compliant
Notices
Possible notices include:
- Missing information
- Math corrections
- Estimated billing
Payments
- Electronic: 1–2 days
- Paper: 1–2 weeks
Refunds
- Processed separately
- May take months
- Subject to review
Compliance Monitoring
- Affects future filings
- May trigger audits
Collections
Escalation may include:
- Penalties
- Tax liens
- License suspension
- Asset seizure
Preguntas frecuentes
What’s the difference between franchise tax and sales tax?
Sales tax is collected from customers. Franchise tax is a business privilege tax based on margin.
Why do I owe tax if my business lost money?
Franchise tax is based on revenue, not profit.
When is my first report due if I just formed an LLC?
May 15 of the following year, covering your initial short period.
Can I deduct both COGS and compensation?
No. You must choose only one deduction method.
How does Texas tax multi-state businesses?
Using a single-factor formula based on gross receipts.
What if I made an error after filing?
File an amended return and correct it promptly.
What is a Public Information Report?
A required companion filing that reports ownership and structure details.
Recursos adicionales
For detailed instructions specific to your report year, visit the Texas Comptroller's Franchise Tax Forms page.
The Comptroller's Taxpayer Services Division can answer specific questions at 800-252-1381.
This guide provides general information based on Texas law as of 2025 and should not be considered legal or tax advice.
