What Form 05-158 Is For
Form 05-158, officially known as the Texas Franchise Tax Report (Long Form), is the state's way of collecting a privilege tax from businesses operating in Texas. Think of the franchise tax not as a tax on your income, but rather as the price of doing business in the Lone Star State. The Texas Comptroller of Public Accounts requires this form from corporations, limited liability companies, partnerships, banks, professional associations, and most other business entities either formed in Texas or doing business within state borders.
For the 2020 report year, the form comes in two pages (05-158-A and 05-158-B) and calculates your tax liability based on your business's "margin"—essentially your revenue after subtracting certain allowable deductions. You'll use this form if your business has annualized total revenue exceeding $20 million, or if you prefer not to use the simpler EZ Computation option even though you qualify. The Long Form allows you to claim various deductions and credits that aren't available on simpler filing options, potentially reducing your tax bill. Texas Comptroller
When You’d Use Form 05-158
Regular Annual Filing
Most businesses file Form 05-158 annually by May 15 for the previous year's business activities. If May 15 falls on a weekend or legal holiday, the deadline shifts to the next business day. Your report covers the accounting period ending in the previous calendar year—for example, if your fiscal year ends on December 31, 2019, you'd file your 2020 franchise tax report by May 15, 2020.
Final Filing
If you're closing your business or ending your Texas presence, you'll file a final version of Form 05-158 marked "FINAL" instead of "ANNUAL." Out-of-state entities ending their Texas nexus must file this final report within 60 days of ceasing business operations in the state.
Late Filing
Late filings happen—and when they do, you'll still submit the same form, but penalties apply. Even if you owe no tax, filing after the deadline triggers an automatic $50 penalty. If you do owe tax, additional penalties start at 5 percent for payments made 1–30 days late and increase to 10 percent after 30 days. Interest charges begin accruing 61 days after the due date.
Amended Filing
Amended reports serve several purposes: correcting mathematical errors, changing your margin calculation method, electing to use a different deduction, or supporting a refund claim. You can even amend from the simpler EZ Computation or No Tax Due Report to the Long Form if you discover you're eligible for deductions or credits you initially missed. Texas Comptroller
Normas o detalles importantes para 2020
Revenue Thresholds and Rates
The 2020 report year operates under specific thresholds and rates that vary from other years. The no tax due threshold sits at $1,180,000 in annualized total revenue. The compensation deduction caps at $390,000 per person. Tax rates depend on your business type:
- Retail and wholesale businesses: 0.375 percent
- Other businesses: 0.75 percent
Calculating Total Revenue and Margin
Understanding what counts as "total revenue" matters tremendously. You start with revenue reported for federal income tax purposes, then subtract specific exclusions.
After establishing total revenue, you calculate margin using one of four methods:
- Total revenue times 70 percent
- Total revenue minus cost of goods sold
- Total revenue minus compensation
- Total revenue minus $1 million
Formularios y anexos obligatorios
Critical filing requirements extend beyond just the tax form itself:
- Form 05-158-A and 05-158-B (both required)
- Form 05-102 or 05-167 (information reports)
- Form 05-160 (Credits Summary)
- Form 05-178 (R&D credits)
- Form 05-180 (historic credits)
Normas del grupo combinado
Combined groups must file:
- Form 05-166 (Affiliate Schedule)
- Form 05-177 (Common Owner Information Report)
Paso a paso (visión general)
1. Gather Financial Records
Begin by gathering your federal tax return and financial records covering your accounting period.
2. Complete Basic Information
Start with Page 1 (Form 05-158-A):
- Legal entity name
- Texas taxpayer number
- Fechas del ejercicio contable
- Contact information
3. Calculate Total Revenue
Report gross receipts and subtract allowable exclusions. Annualize if needed.
4. Calculate Margin
Compute using all four methods:
- 70 percent method
- Cost of goods sold
- Compensation
- $1 million deduction
Use the method that produces the lowest taxable margin.
5. Apply Apportionment
Determine what portion of your margin is taxable in Texas based on revenue sourcing.
6. Calculate Tax Due
On Page 2 (Form 05-158-B):
- Apply tax rate
- Subtract credits
- Determine final liability
7. Complete Required Reports
Include:
- Information report (05-102 or 05-167)
- Any required schedules
8. File and Pay
Submit electronically or by mail. Payments over $10,000 must be electronic. Texas Comptroller
Errores comunes y cómo evitarlos
Missing Pages
Failing to file both 05-158-A and 05-158-B results in incomplete filing.
Wrong Information Report
Filing the wrong form (05-102 vs. 05-167) leads to penalties.
Missing Credit Schedules
Credits require supporting forms like 05-160, 05-178, or 05-180.
Combined Reporting Errors
Failing to include Form 05-166 or omitting entities causes rejection.
Anualización incorrecta
Always adjust revenue for non-12-month periods.
Incumplimiento de plazos
Late filing triggers a $50 penalty, even if no tax is due.
¿Qué ocurre después de presentar la solicitud?
Processing and Confirmation
Electronic filings process quickly; paper filings take longer.
Good Standing Status
Successful filing maintains your legal ability to operate in Texas.
Notices and Issues
Entre los avisos habituales se incluyen:
- Form 05-211 (intent to forfeit)
- Form 05-212 (forfeiture)
- Form 05-213 (registration forfeiture)
Refunds and Amendments
Refunds require amended filings and must be claimed within four years.
Audits
The Comptroller may audit within four years. Respond promptly to requests. Texas Comptroller
Preguntas frecuentes
If my business earned less than the $1,180,000 no tax due threshold in 2020, do I still need to file Form 05-158?
No. For 2020, businesses below this threshold could file Form 05-163 instead. However, you still must submit an information report (Form 05-102 or 05-167).
Can I file Form 05-158 electronically, or must I mail paper forms?
Electronic filing is encouraged through Webfile or approved software. Paper filing is still available, but large payments must be made electronically.
What if my business is part of a combined group—do I file separately or with the group?
Combined groups file one consolidated report. Individual entities still submit their own information reports but not separate tax reports.
Should I choose the cost of goods sold deduction or the compensation deduction?
Calculate both and choose the one that results in the lowest taxable margin. This varies depending on your business type.
My business closed mid-year—how do I handle the final franchise tax report?
File a final report marked "FINAL" covering the period through closure. Include Form 05-359 if terminating your entity.
What’s the difference between requesting an extension and filing late?
An extension avoids the $50 penalty if filed on time but does not extend the payment deadline. Late filing triggers penalties and interest.
If I discover an error after filing, how do I correct my franchise tax report?
File an amended Form 05-158 marked "AMENDED" with corrected information and an explanation of changes.
This summary provides general guidance based on official Texas Comptroller publications and should not replace professional tax advice.
