What the Form Is For
The Texas Franchise Tax No Tax Due Information Report, officially known as Form 05-163, is a simplified annual filing option for businesses that don't owe franchise tax to the state of Texas. Think of it as a way to check in with the state and say ""we're still here, but we don't owe any tax this year."" For the 2013 report year, this form was available to businesses that fell into one of four specific categories: those with annualized total revenue of $1,030,000 or less, passive entities (certain partnerships and trusts that primarily hold property and receive passive income), entities with zero Texas gross receipts, or Real Estate Investment Trusts meeting specific qualifications under Texas Tax Code Section 171.0002(c)(4).
The franchise tax itself is Texas's version of a corporate income tax—a privilege tax charged to businesses for the right to operate in the state. Even if your business doesn't owe the actual tax, Texas still wants to know you exist and are operating, which is where the No Tax Due Report comes in. It's essentially a compliance document that keeps your business in good standing with the Texas Comptroller of Public Accounts without requiring you to calculate and pay tax.
When You’d Use This Form (Including Late and Amended Filings)
For the 2013 report year, the annual No Tax Due Report was due on May 15, 2013, covering your business's accounting period that ended in 2012. This report year structure can be confusing at first: the 2013 report covers 2012 financial activity. Most businesses use a calendar year ending December 31, 2012, as their accounting year end date, which determines what figures appear on the 2013 report due the following May.
You would file this form annually if your business consistently qualifies under the no tax due threshold. If your business needed to cease operations, you'd file a final No Tax Due Report instead of the annual version, marking the end of your franchise tax obligations. For report years 2013 and earlier, businesses could submit paper forms by mail, though the Comptroller encouraged electronic filing through their Webfile system. Electronic filing wasn't yet mandatory for No Tax Due Reports in 2013—that requirement came later, taking effect for reports originally due on or after January 1, 2016.
If you missed the May 15 deadline, you'd file a late report, which triggers penalties. The Comptroller assesses a $50 penalty automatically for any franchise tax report filed after the due date, regardless of whether tax is owed. If circumstances beyond your control caused the delay—natural disasters, serious illness, or other emergencies—you could request a penalty waiver through the Comptroller's waiver process. For amended reports, if you discovered an error after filing, you could submit a corrected No Tax Due Report. Texas law allows amended franchise tax reports, though the process for 2013 involved filing the corrected form with clear notation that it was an amendment.
Key Rules or Details for 2013
Eligibility Requirements
Several important eligibility requirements governed who could file the No Tax Due Report for 2013. First and most important: you must genuinely owe no tax. This meant your annualized total revenue couldn't exceed $1,030,000, or you needed to qualify as a passive entity, REIT, or have zero Texas gross receipts.
Passive Entity Rules
Passive entities had to be partnerships or trusts (not business trusts) that earned more than 90 percent of their gross income from passive sources like royalties, bonuses, interest, dividends, and rent from real property. These passive entities also couldn't receive more than 10 percent of gross income from operating an active business.
Required Companion Filing
Even though you owed no tax, filing the No Tax Due Report wasn't a solo activity. Every business filing Form 05-163 for 2013 also had to submit a Public Information Report on Form 05-102. This companion form collected basic business information including your business name, mailing address, principal office location, business start date, ownership structure, registered agent information, and details about your business activities.
Revenue Annualization
The revenue threshold of $1,030,000 required annualization. If your accounting period was shorter or longer than 12 months—common for new businesses or those changing their year-end—you had to convert your actual revenue to what it would have been over a full year. The annualization formula multiplied your actual revenue by 365, then divided by the number of days in your accounting period.
Combined Groups and Tiered Partnerships
Combined groups had special rules. If your business was part of a combined group—multiple entities under common ownership required to file together—the no tax due threshold applied to the entire combined group's revenue, not individual members. Tiered partnerships, which are partnerships that own other partnerships, had additional reporting requirements even when filing No Tax Due Reports.
Step-by-Step (High Level)
Gather Required Information
Filing Form 05-163 for 2013 began with gathering your financial records for the accounting period. You needed your revenue figures, accounting year begin and end dates, and your Texas taxpayer number assigned when you initially registered with the Comptroller.
Complete Form 05-163
You'd indicate which qualification category allowed you to file the No Tax Due Report: passive entity status, revenue below the threshold, zero Texas gross receipts, or REIT qualification.
Enter Business Details
On the form, you entered:
- Taxpayer number (11-digit)
- Legal entity name
- Report year (2013)
- Accounting period dates
Prepare Public Information Report (Form 05-102)
This form required:
- Officer, director, and member names
- Ownership percentages
- Business addresses
- NAICS codes
- Registered agent information
Submit the Forms
For 2013 reports, you could:
- File electronically via Webfile
- Mail paper forms to the Texas Comptroller
The Comptroller recommended keeping copies of all submitted documents for your records.
Common Mistakes and How to Avoid Them
Confusing Report Year vs. Accounting Period
Businesses often confused the report year (2013) with the accounting period it covered (typically 2012). The 2013 report due May 15 reflects 2012 activity.
Incorrect Revenue Annualization
If your business didn’t operate for a full year, you had to annualize revenue. Failing to do so could incorrectly qualify or disqualify your filing.
Missing the Public Information Report
Some businesses filed Form 05-163 without Form 05-102. Both forms are required, and missing one results in an incomplete filing.
Misclassifying Passive Entity Status
Businesses sometimes incorrectly claimed passive status despite having active income above 10 percent, which disqualifies them.
Late Filing Penalties
Missing the May 15 deadline results in a $50 penalty, even if no tax is owed. Filing on time still matters.
What Happens After You File
Processing and Confirmation
Electronic filers receive immediate confirmation, while paper filings take several weeks.
Review by the Comptroller
The Comptroller verifies:
- Eligibility status
- Completeness of forms
- Accuracy of reported data
Notices and Corrections
If issues arise, the Comptroller sends notice letters with a 30–60 day response window.
Good Standing Status
A complete and accepted filing keeps your business in good standing, which is required for:
- Certificates of account status
- Mergers or conversions
- Business transactions
Future Filing Requirements
Filing a No Tax Due Report one year does not guarantee eligibility for the next. Businesses must reassess annually.
FAQs
If my business started operations in 2012, do I still file a 2013 No Tax Due Report?
Yes, if your business became subject to franchise tax during 2012, you would file your first annual report in 2013, due May 15. Your accounting year end date would be December 31, 2012 (or whatever fiscal year end you use), and the report would cover from your beginning date through that year end. New businesses that qualify—typically those with annualized revenue at or below $1,030,000—can file the No Tax Due Report rather than the full return.
Can I file Form 05-163 if I owe less than $1,000 in franchise tax?
No. For the 2013 report year, the No Tax Due Report was only for businesses that owed absolutely zero franchise tax. If you calculated your tax liability and it came out to less than $1,000, you still needed to file either the EZ Computation form or the Long Form and pay the calculated tax amount.
What's the difference between a passive entity and just having low revenue?
These are two separate qualification paths. The revenue threshold applies broadly, while passive entity status depends on the type and source of income. Passive entities can exceed the revenue threshold and still qualify, while non-passive businesses must stay below it.
I filed my No Tax Due Report on time, but forgot the Public Information Report. What should I do?
File the Public Information Report (Form 05-102) as soon as possible. The Comptroller will likely send a deficiency notice. Prompt correction helps maintain good standing, though penalties may still apply.
Does filing a No Tax Due Report mean I don't need to file anything else with Texas?
Not necessarily. You may still need to file:
- Sales tax returns
- Employer withholding reports
- Industry-specific filings
The franchise tax is only one part of compliance.
Can I get an extension if I need more time to file my No Tax Due Report?
Yes. Filing Form 05-164 before May 15 extends the deadline to November 15, 2013. While no payment is required for No Tax Due filers, the extension still provides extra time.
What happens if the Comptroller disagrees that I qualify for No Tax Due status?
The Comptroller will issue a notice requesting the correct franchise tax return. You’ll need to file the appropriate form and may owe penalties and interest. You can also respond with supporting documentation if you believe your original filing was correct.
