What the Form Is For
Texas Form 05-164 is the official document businesses use to request extra time to file their franchise tax reports with the Texas Comptroller of Public Accounts. Think of it as asking for homework extensions in school, except this involves your business taxes. The Texas franchise tax applies to most entities formed in Texas or doing business in the state, including corporations, limited liability companies, partnerships, and certain other business structures. The annual franchise tax report normally comes due on May 15 each year, and Form 05-164 allows qualifying businesses to push that deadline back to November 15—giving them an additional six months to prepare their paperwork. The form serves a dual purpose: it's both your formal extension request and the mechanism for making the required payment that validates the extension. Without this form (or an equivalent online submission), businesses facing tight deadlines would risk penalties and interest charges for late filing.
When You'd Use This Form
You'd file Form 05-164 whenever you cannot complete your franchise tax report by the original May 15 deadline. This situation commonly arises when businesses are waiting for final financial statements, dealing with complex accounting issues, or simply need more time to gather accurate information. The form applies to annual reports—those routine yearly filings every taxable entity must submit. It also works for final reports, which businesses file within 60 days after they stop doing business in Texas or no longer have sufficient connection (nexus) to trigger tax obligations. First-time filers who just started their Texas business can use Form 05-164 as well, though certain payment options won't be available to them. Interestingly, businesses that owed no tax in the previous year and only filed information reports can request what's called a "no payment extension"—they still get the extra time without sending money upfront. The form isn't for amended returns, though; if you need to correct a previously filed report, different procedures apply, and you'll submit amended paperwork directly rather than through the extension process.
Key Rules or Details for the Filing Year
Payment Requirements
The most critical rule governing Form 05-164 centers on timing and payment. To secure a valid extension, you must submit your request on or before the original due date—if May 15 falls on a weekend or holiday, the next business day becomes the deadline, and "on or before" means the form must be postmarked or electronically transmitted by that date.
The payment requirement has two acceptable options:
- Pay 100 percent of the tax you reported and paid in the previous year
- Pay 90 percent of the tax you'll owe with the current year's report
The 100 percent option offers convenience if your tax liability stays relatively stable year-over-year, but new businesses filing their first annual report cannot use this option because they have no prior year to reference. Similarly, if your business was part of a combined group last year but files separately this year, you're stuck with the 90 percent calculation.
Electronic Filing Rules
When the actual report comes due on the extended deadline and you haven't paid enough—say you paid 85 percent thinking it was sufficient—penalties and interest will apply to the shortage.
Entities that paid $10,000 or more in franchise taxes during the previous state fiscal year (September 1 through August 31) face electronic payment requirements, and those paying $500,000 or more must use TEXNET, the state's electronic payment system, rather than the paper form.
If you make an online extension payment through Webfile or TEXNET, don't submit the paper Form 05-164—doing so creates duplicate filings and processing confusion.
Step-by-Step (High Level)
Determine Filing Method
Filing Form 05-164 follows a straightforward path, though the specifics depend on your payment history and chosen method. Start by determining whether you must file electronically; check your previous year's tax payment to see if it exceeded $10,000, which triggers mandatory electronic filing.
Choose Filing Option
If electronic filing isn't required, you can choose between:
- Online Webfile system
- Paper form submission
Complete the Form
For paper filing:
- Download Form 05-164 from the Texas Comptroller's forms page
- Ensure the correct version for your report year
- Enter:
- Business name
- Taxpayer number
- Accounting period dates
Calculate Payment
Review last year's franchise tax report or estimate current liability. Choose:
- 100% of last year’s tax
- 90% of current year’s estimated tax
Submit and Pay
- Attach payment (check or electronic)
- Submit by the deadline
For electronic filers:
- Log into Webfile or TEXNET
- Use tax type code 13080 (TEXNET)
- Complete submission by deadline
- TEXNET users must submit by 8 p.m. Central Time on the business day before the due date
Keep Records
Once submitted, keep confirmation records showing the submission date and payment amount.
Common Mistakes and How to Avoid Them
Underpaying the Required Amount
The single biggest mistake businesses make with Form 05-164 involves miscalculating the payment amount. Many entities pay less than the required 90 percent, either through math errors or wishful thinking about what they'll owe. To avoid this, work carefully through your revenue and deduction calculations—when in doubt, pay slightly more rather than less, as overpayments get credited when you file the actual report.
Missing the Deadline
Another frequent error is missing the submission deadline entirely. Mark May 15 on your calendar well in advance (adjusting for weekends and holidays), and don't wait until the last day.
Confusing Federal and State Extensions
Some businesses mistakenly believe a federal tax extension automatically covers their Texas franchise tax obligation—it doesn't.
Using the Wrong Filing Method
Entities required to pay electronically sometimes submit paper forms, creating processing delays and potentially invalidating the extension request.
Combined Group Filing Errors
Combined groups face special complications; they must use Form 05-165 in addition to (or instead of) Form 05-164 depending on requirements.
Not Filing When No Tax Is Due
Some businesses request extensions when they don't actually owe any tax. These entities can file a no payment extension, but they must still file the extension form.
What Happens After You File
Extension Status
Once the Texas Comptroller receives your Form 05-164 and payment, the extension becomes tentatively granted. The extension isn't finalized until you file the actual franchise tax report.
Extended Deadlines
- November 15 for most entities
- August 15 for EFT-required entities
Some EFT payers may request a second extension to November 15.
Payment Review and Penalties
If your extension payment was less than 90 percent of the actual tax due:
- 5% penalty applies
- Interest accrues from May 15
If balance exceeds 10% of total tax, additional penalties apply.
Refunds or Credits
For overpayments:
- Credited to your account
- Or refunded
Processing Timeline
The Comptroller typically acknowledges receipt within days. No formal approval letter is issued.
FAQs
Can I file an extension if I don't owe any franchise tax?
Yes, absolutely. If your business falls under the no tax due threshold or only needs to file a Public Information Report or Ownership Information Report without owing tax, you can still request an extension using Form 05-164. Submit the form by the May 15 deadline with zero payment, and you'll receive the extension to November 15 for filing your information reports.
What if I already filed a federal tax extension—does that cover my Texas franchise tax?
No, federal and Texas extensions are completely separate. A federal extension filed with the IRS has no effect on your Texas franchise tax obligations. You must specifically request a Texas extension using Form 05-164 and meet Texas's payment requirements.
If my business was part of a combined group last year but files separately this year, can I use the 100 percent payment option?
No. When your filing status changes, the 100 percent option isn't available. You must pay at least 90 percent of your current year's estimated tax.
What happens if I submit both an online extension payment and the paper Form 05-164?
Don't do this. Submitting both creates duplicate entries and may cause processing delays. Choose one method only.
How do I know if I'm required to pay electronically instead of using the paper form?
Check your prior year’s payment. If you paid $10,000 or more, electronic filing is required. Over $500,000 requires TEXNET.
Can I get more than six months—is a second extension available?
Only EFT payers qualify for a second extension. They can extend from August 15 to November 15 by submitting another request and paying remaining tax.
What penalties apply if my extension payment turns out to be insufficient?
If you pay less than 90 percent:
- 5% penalty applies
- Interest accrues from May 15
- Additional penalties may apply beyond the 10% threshold
