What Form 05-163 Is For
The Texas Franchise Tax No Tax Due Information Report (Form 05-163) was a simplified franchise tax filing option for businesses that qualified to report no tax liability to the state. This form allowed certain entities doing business in Texas to satisfy their annual franchise tax reporting obligation without calculating or paying tax. The form was used from approximately 2008 through the 2023 report year and was officially discontinued for reports due on or after January 1, 2024.
The Texas franchise tax is a privilege tax imposed on entities for the right to do business in the state. While most businesses must calculate their tax liability using complex formulas based on revenue and business activities, Form 05-163 provided a streamlined reporting path for qualifying entities. These entities still had reporting obligations to maintain their good standing with the state, but they didn't owe any actual tax.
During the 2011 report year, five categories of entities could file Form 05-163: passive entities as defined by Texas Tax Code Section 171.0003; entities with annualized total revenue at or below $1 million (the no tax due threshold for that year); entities with zero Texas gross receipts; Real Estate Investment Trusts (REITs) meeting specific qualifications under Texas Tax Code Section 171.0002(c)(4); and qualifying new veteran-owned businesses during their initial exemption period.
Even when filing this simplified form, entities were still required to submit the Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167) along with Form 05-163. These accompanying forms provided the state with essential information about business ownership and management structure, which Texas uses for transparency and accountability purposes.
When You’d Use Form 05-163
Annual Filing Requirement
Form 05-163 was filed annually by May 15 each year, the standard due date for Texas franchise tax reports. If your business qualified under one of the five categories during the reporting period, you would file this form instead of the more complex EZ Computation or Long Form reports.
Late Filing Rules
Late filing was subject to penalties even for no tax due reports. Texas assessed a $50 late filing penalty on any franchise tax report filed after the due date, regardless of whether tax was owed. This meant that even though you owed no tax, filing Form 05-163 late would still result in a $50 penalty. The penalty applied to encourage timely compliance and maintain accurate state records of active businesses.
Documentos modificados
Amended no tax due reports could be filed to correct errors on previously submitted forms. Common reasons for amendments included correcting accounting period dates, fixing entity classification errors, or updating information that affected qualification for no tax due status. If you discovered that your entity didn't actually qualify to file the no tax due form (for example, your revenue exceeded the threshold), you would need to file an amended report using the appropriate tax calculation form and potentially pay back taxes with interest.
Extensiones
Extensions were available for franchise tax reports, including no tax due reports. Entities could request an automatic extension using Form 05-164 or through the state's Webfile system. The extension provided additional time to file but didn't extend the deadline for paying any tax that might be due. For no tax due filers, the extension was primarily useful if you needed more time to gather information or determine your actual qualification status.
Key Rules or Details for 2011
Umbral de ingresos
The most critical rule for 2011 was the revenue threshold: entities with annualized total revenue of $1 million or less qualified for no tax due status. This threshold changed over the years, increasing to $1.08 million in 2014, $1.13 million by 2016, $1.18 million in 2020, and eventually $2.47 million before the form was discontinued. Annualized total revenue had a specific definition under Texas tax law and wasn't necessarily the same as your total sales or receipts.
Passive Entity Qualification
Passive entities had their own qualification pathway regardless of revenue. A passive entity under Texas Tax Code Section 171.0003 is generally an entity that receives at least 90 percent of its gross income from passive sources like royalties, dividends, interest, and rental income, and doesn't pay more than 10 percent of its gross income for compensation. These entities qualified for no tax due status even if their revenue exceeded the threshold.
Filing Method Requirements
Electronic filing became mandatory for reports originally due on or after January 1, 2016. This meant that for the 2011 report year, paper filing was still acceptable, but businesses needed to transition to electronic filing through the Comptroller's Webfile system in subsequent years. The state made this change to streamline processing and reduce errors.
Required Accompanying Forms
The Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167) remained mandatory even when filing a no tax due report. Entities organized as corporations, LLCs, limited partnerships, professional associations, or financial institutions filed Form 05-102, while other entity types filed Form 05-167.
Normas del grupo combinado
Combined groups had special considerations. If your business was part of a combined group under common ownership, each member organized in Texas or having nexus in Texas needed to file its own Public Information Report or Ownership Information Report, even if the combined group as a whole filed a single no tax due report.
Paso a paso (visión general)
Step 1: Determine Qualification Status
Calculate your annualized total revenue for the reporting period using the specific definitions in the franchise tax instructions. Compare this to the $1 million threshold for 2011. Alternatively, determine if your entity meets the passive entity definition, qualifies as a REIT, or has zero Texas gross receipts.
Step 2: Gather Entity Information
You'll need:
- Texas taxpayer number
- Accounting year begin and end dates
- Legal entity name
- Registered business address
Have documentation ready to support your qualification.
Step 3: Complete Form 05-163
Identify your qualification category and provide accounting period details. For 2011, filing could be done on paper or electronically.
Step 4: Prepare Required Reports
- Form 05-102 (Public Information Report) for corporations, LLCs, etc.
- Form 05-167 (Ownership Information Report) for other entity types
Step 5: Sign and Submit
An authorized individual must sign the forms. Submit via Webfile or mail and keep copies for your records.
Errores comunes y cómo evitarlos
Miscalculating Revenue
Annualized total revenue isn't simply calendar-year sales. Follow Form 05-395 instructions carefully.
Missing Required Reports
Failing to submit Form 05-102 or 05-167 can lead to forfeiture—even if no tax is due.
Filing Late
A $50 penalty applies even if no tax is owed. Always file by May 15.
Misclassifying Entity Type
Not all entities qualify as passive. Review definitions carefully.
Ignoring Electronic Filing Rules
Post-2016 filings require electronic submission. Plan ahead.
¿Qué ocurre después de presentar la solicitud?
Processing and Publication
The Comptroller processes your filing and shares information with the Secretary of State. Data is published in the Taxable Entity Search database.
Confirmation
- Webfile: immediate confirmation
- Mail: no confirmation unless issues arise
Mantenerse al día
Filing satisfies franchise tax requirements and preserves your legal rights as a business entity.
Compliance Reviews
The Comptroller may audit your filing. Keep records for at least four years.
Notices and Follow-Ups
You may receive notices for missing information or audits. Address them promptly.
Preguntas frecuentes
What happened to Form 05-163?
The No Tax Due Information Report was discontinued for reports due on or after January 1, 2024. Entities now follow updated filing rules but may still need to submit ownership-related reports.
If I have no revenue, do I still need to file?
Yes, zero revenue qualifies you for no tax due status, but you must still file the report and required information forms.
What if my revenue was slightly over $1 million?
You must file a different form and calculate tax liability unless you qualify under another category like passive entity status.
Can I file Form 05-163 for my final report year?
Yes, if qualified. Final reports must be filed within 60 days of ceasing business in Texas.
Does filing this form affect my standing with the Secretary of State?
Yes, proper filing helps maintain good standing, but additional reporting requirements may still apply.
What if I realized I should have filed a different form?
File an amended report using the correct form. You may owe taxes, interest, or penalties.
Are there any exceptions to the Public Information Report requirement?
Yes, passive entities are exempt from filing Forms 05-102 or 05-167.
Important Note: This summary reflects Form 05-163 as it existed in 2011 through 2023. The form is no longer used after 2024. Always refer to current Texas Comptroller guidelines.
