What the Form Is For
Texas Form 05-169, the Franchise Tax EZ Computation Report, is a simplified method for calculating and reporting the Texas franchise tax—a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in the state. This streamlined version allows eligible entities to skip the complex margin calculations required on the Long Form (Form 05-158) and instead compute tax using a straightforward formula based solely on total revenue.
For the 2021 report year, the EZ Computation applies a flat tax rate of 0.331 percent to your apportioned total revenue. This form is designed for smaller businesses that want a simpler filing process without navigating cost of goods sold deductions, compensation deductions, or the various margin calculation methods. The tradeoff for simplicity is clear: entities using the EZ Computation cannot claim any margin deductions or franchise tax credits that would otherwise reduce their tax liability.
The form serves businesses that meet specific revenue thresholds and prefer administrative ease over potentially complex tax optimization strategies. Along with Form 05-169, filers must submit a Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167) depending on their entity type, and if payment is due, Form 05-170 must accompany any check or money order.
When You’d Use This Form (Late or Amended Filings)
Understanding when to file Form 05-169 goes beyond the standard May 15 annual deadline.
Filing Types
The form comes in two versions—Annual and Final—to accommodate different business scenarios.
- Annual report: Regular yearly franchise tax obligation
- Final report: Required when your entity terminates, converts, merges, or ceases doing business in Texas
Late Filing Rules
Late filing situations occur when you miss the May 15 deadline.
- Automatic $50 penalty for late filing (even if no tax is owed)
- 5% penalty if tax is paid 1–30 days late
- 10% penalty if tax is paid after 30 days
- Interest accrues on unpaid tax after 61 days
Amended Filings
Amended reports provide a correction mechanism for various situations.
You can amend to:
- Correct mathematical errors
- Adjust total revenue
- Fix apportionment factors
- Switch from EZ Computation to Long Form
An amended report that reduces tax liability functions as a refund request and must meet statutory refund deadlines.
Extensions
Extensions of time to file are available by submitting Form 05-164 on or before May 15.
- Extends filing time
- Does NOT extend payment deadline
Key Rules or Details for 2021
Revenue Thresholds
- $20 million or less → Eligible for EZ Computation
- $1,180,000 or less → Eligible for No Tax Due Report (Form 05-163)
If tax due is under $1,000, no payment is required—but filing is still mandatory.
Annualizing Revenue
If your accounting period is not 12 months:
- Divide revenue by number of days
- Multiply by 365
Total Revenue Definition
Total revenue starts with federal income tax figures but excludes:
- Certain dividends and interest
- Foreign royalties and dividends
- Specific flow-through funds
Apportionment Formula
- Texas receipts ÷ total receipts everywhere
- Multiply result by total revenue
Limitations of EZ Computation
You cannot claim:
- Cost of goods sold deductions
- Compensation deductions
- Standard deduction
- Any tax credits
Required Supporting Forms
Information Reports
- Form 05-102 → Corporations, LLCs, LPs, etc.
- Form 05-167 → Trusts, associations
Additional Forms (if applicable)
- Form 05-166 → Affiliate Schedule
- Form 05-177 → Common Owner Report
- Form 05-175 → Tiered partnerships
Step-by-Step (High Level)
Step 1: Enter Entity Information
- Texas taxpayer number
- Business name and address
- NAICS code
- Report type (Annual or Final)
Step 2: Calculate Total Revenue
Start with federal revenue, subtract exclusions, and report the final number.
Step 3: Determine Apportionment Factor
- Texas receipts ÷ total receipts
- Enter as decimal
Step 4: Calculate Apportioned Revenue
Multiply total revenue by apportionment factor.
Step 5: Apply Tax Rate
Multiply by 0.00331.
Step 6: Check $1,000 Threshold
- Below $1,000 → No tax due
- Above → Pay remaining balance
Step 7: Submit Payment
Use Form 05-170 if paying by check.
Step 8: File the Return
- Mail to Comptroller
- Or file online via Webfile
Common Mistakes and How to Avoid Them
Not Annualizing Revenue
Incorrect period adjustments can disqualify eligibility or distort tax amounts.
Apportionment Errors
Common issues:
- Reversing numerator/denominator
- Misclassifying receipts
Claiming Deductions
EZ Computation does NOT allow deductions or credits.
Missing Required Reports
Failing to include required information reports results in incomplete filings.
Confusing Thresholds
- $20M → Eligibility for EZ
- $1.18M → No Tax Due threshold
Filing Late
Triggers:
- $50 penalty
- Additional percentage penalties
Incorrect Entity Information
Wrong taxpayer numbers or outdated addresses can delay processing.
What Happens After You File
Processing
- Return is matched to your account
- Electronic filings get instant confirmation
Review
The Comptroller checks for:
- Accuracy
- Completeness
- Missing documents
Payment Handling
- Payments processed separately
- Discrepancies trigger notices
Account Status
- “Current” status requires full compliance
- Needed for business actions like dissolution
Amendments and Refunds
- Compared against original filings
- Refunds subject to time limits
Notices
Common issues include:
- Missing forms
- Underpayments
- Errors
Ignoring notices can escalate penalties.
Final Reports
If closing your business:
- Must file final report
- Receive Certificate of Account Status
FAQs
If my revenue is under $20 million, am I required to use the EZ Computation or is it optional?
The EZ Computation is optional. Eligible businesses can choose between EZ and Long Form. Many calculate both methods to determine which produces lower tax, especially if they have significant deductions or credits.
Can I switch from the EZ Computation to the Long Form after I've already filed?
Yes. You can file an amended return using the Long Form and request a refund if applicable. This is useful if deductions would have lowered your tax.
What happens if I accidentally use the EZ Computation when my revenue exceeds $20 million?
You’ll need to correct the filing using the Long Form. The Comptroller may issue a notice, and penalties may apply if not corrected promptly.
Do I still need to file if my calculated tax is less than $1,000?
Yes. Filing is still required to show how the calculation resulted in zero tax due.
Can I use the EZ Computation if I'm part of a combined group?
Yes, if total combined revenue is under $20 million. All members must use the same method.
My business has a June 30 fiscal year end. Which year's form do I use?
You use the form for the year the report is due, not the year that ended.
What's the difference between the Public Information Report and the Ownership Information Report?
- Form 05-102 → Public, for corporations and LLCs
- Form 05-167 → Confidential, for trusts and similar entities
