Para qué sirve el formulario
The Texas Franchise Tax Report (Form 05-158) is the standard form used by businesses to report and pay franchise tax to the Texas Comptroller of Public Accounts. Texas franchise tax is a privilege tax—essentially, it's the cost of doing business in the Lone Star State. If your company is formed in Texas or conducts business there, you're likely on the hook for this tax.
Think of franchise tax as an annual membership fee for operating in Texas. Unlike income tax (which Texas doesn't have at the state level), franchise tax is based on your business's "margin"—a calculation derived from your revenue after certain deductions. The Form 05-158 comes in two main versions: the "long form" (pages 05-158-A and 05-158-B for detailed reporting) and the simplified "EZ Computation Report" (Form 05-169) for smaller businesses.
Most Texas entities must file this report annually, including corporations, limited liability companies (LLCs), partnerships, professional associations, banks, and business trusts. Even S corporations and single-member LLCs aren't exempt. However, sole proprietorships (except single-member LLCs) and general partnerships owned entirely by individuals don't need to file.
The report calculates your tax liability based on your total revenue, with various deduction options available. For 2024 and 2025 reports, businesses with annualized total revenue at or below $2,470,000 (the "no tax due threshold") don't owe franchise tax and, as of 2024, no longer need to file Form 05-158 at all—though they still must file an information report about their ownership or public information.
When You’d Use Form 05-158
Late and Amended Reports
The standard deadline for Texas franchise tax reports is May 15 each year. If May 15 falls on a weekend or holiday, the deadline shifts to the next business day. Your report covers an accounting period that typically ends during the previous calendar year, following your federal income tax accounting period.
Filing Late
Missing the deadline triggers automatic penalties. A $50 late-filing penalty applies to every report filed after the due date—even if you don't owe any tax. If you owe tax and pay 1-30 days late, add a 5% penalty on the tax amount. Pay more than 30 days late, and the penalty jumps to 10%. Interest charges begin accruing 61 days after the due date. These penalties stack up quickly, so timely filing matters.
If you need more time, you can request an extension by paying at least 90% of your expected tax liability (or 100% of last year's tax amount) by the original May 15 deadline. This extends your filing deadline to August 15, and you can request a second extension to November 15 if needed. Extensions are submitted through the Comptroller's Webfile system or, for larger taxpayers, through TEXNET.
Amended Reports
You may file an amended Form 05-158 to correct mathematical errors, change your margin calculation method (switching between cost of goods sold and compensation deductions, for example), or support a refund claim. If you originally filed using the EZ Computation but realize you'd pay less tax using the long form with deductions, you can amend to the long form. However, amended reports that reduce your tax liability are treated as refund requests and must meet specific refund requirements and deadlines.
Final Reports
If your business is closing or ceasing Texas operations, you'll file a final franchise tax report within 60 days of ending business activities in Texas. Mark "FINAL" on the report and include a request for a Certificate of Account Status (Form 05-359) if you need to officially terminate with the Texas Secretary of State.
Key Rules or Details for 2014
No Tax Due Threshold
For 2024 and 2025 reports, this is set at $2,470,000 in annualized total revenue. For 2026 and 2027, it increases to $2,650,000. If your annualized revenue falls at or below this threshold, you owe no franchise tax. Starting with 2024 reports, you don't even file Form 05-158—you only need to file an information report (Public Information Report or Ownership Information Report).
Tax Rates
The franchise tax rate depends on your business type. Retail and wholesale businesses pay 0.375% of taxable margin. All other businesses pay 0.75%. These rates apply after you've calculated your margin and apportioned it to Texas.
EZ Computation
Businesses with annualized total revenue of $20 million or less can elect to use the simplified EZ Computation method. You simply multiply your total revenue by your Texas apportionment percentage, then apply a flat 0.331% rate. The trade-off? You can't take cost of goods sold deductions, compensation deductions, or any tax credits. This works well for service businesses with minimal deductible expenses.
Margin Calculation
If you're not using the EZ Computation, you'll calculate taxable margin using one of four methods, whichever gives you the lowest tax:
- total revenue times 70%
- total revenue minus cost of goods sold
- total revenue minus compensation (wages and benefits, subject to a per-person limit of $450,000 for 2024-2025)
- total revenue minus $1 million
You can only choose one deduction per report year.
Information Reports
Nearly all entities must file either a Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167) annually, regardless of whether you owe tax.
Electronic Filing Requirements
Texas law requires electronic filing and payment in most circumstances. Businesses that paid $10,000 or more in franchise tax during the previous state fiscal year must pay electronically. Those that paid $500,000 or more must use TEXNET.
Paso a paso (visión general)
Step 1: Determine Your Filing Obligation
First, calculate your annualized total revenue. If your accounting period isn't exactly 12 months, divide your total revenue by the number of days in the period and multiply by 365.
Step 2: Choose Your Reporting Method
Decide between the long form (Form 05-158) and EZ Computation (Form 05-169).
Step 3: Gather Your Information
Collect federal income tax data, Texas-specific activity details, and compensation records.
Step 4: Calculate Your Margin
Compute margin using all four methods and choose the lowest taxable amount.
Step 5: Apply the Tax Rate and Credits
Multiply your apportioned margin by the applicable tax rate and subtract credits if applicable.
Step 6: Complete Your Information Report
Fill out Form 05-102 or Form 05-167 based on your entity type.
Step 7: File and Pay
Submit electronically through Webfile and include payment if required.
Errores comunes y cómo evitarlos
Mistake #1: Using the Wrong Accounting Period
Ensure your accounting year matches your federal return.
Mistake #2: Failing to Annualize Revenue
Use the correct formula:
(Total Revenue ÷ Days in Period) × 365
Mistake #3: Forgetting the Information Report
Always file Form 05-102 or 05-167 even if no tax is due.
Mistake #4: Missing the $1,000 Minimum Rule
If tax is under $1,000, you owe nothing—but must still file.
Mistake #5: Incorrectly Claiming Credits
Attach all required schedules when claiming credits.
Mistake #6: Using Last Year's Forms
Always download the current year's version.
Mistake #7: Missing Combined Reporting Requirements
File correctly if part of an affiliated group.
¿Qué ocurre después de presentar la solicitud?
Immediate Processing
Webfile submissions process quickly; paper filings take longer.
Account Status Updates
Your account will be marked as current, delinquent, or forfeited.
Certificate of Account Status
You can request proof of compliance for business needs.
Audit Possibility
The Comptroller may audit within four years.
Refunds
Refund claims must meet strict deadlines and documentation rules.
Delinquency Notices
Failure to file triggers escalating notices and penalties.
Next Year's Filing
You must file annually—no reminders are sent.
Preguntas frecuentes
If my business made no revenue last year, do I still need to file?
It depends on your annualized total revenue and report year. If below the threshold, you skip Form 05-158 but still file an information report.
Can I file my franchise tax report on the same day as my federal return?
No. Franchise tax is due May 15 regardless of your federal deadline.
What if I just formed my business mid-year?
Your first report is due May 15 of the following year.
My business operates in multiple states—how does Texas franchise tax work?
You only pay tax on the portion of business activity attributable to Texas using apportionment rules.
What's the difference between the Public Information Report and Ownership Information Report?
It depends on your entity type—some are public, others confidential.
Can I deduct my franchise tax payment on next year's franchise tax report?
No. It is not deductible for franchise tax purposes.
What happens if I file my report but forget to include payment?
You’ll owe penalties and interest until the balance is paid.
