What the Form Is For
Texas Form 05-163, the Franchise Tax No Tax Due Information Report, allows qualifying businesses to inform the Texas Comptroller of Public Accounts that they owe no franchise tax for a given reporting period. The Texas franchise tax is a privilege tax imposed on entities formed or organized in Texas or doing business in the state. While this tax applies broadly, certain businesses qualify to file a simplified No Tax Due Report rather than a full tax calculation report when they meet specific criteria.
For the 2019 report year, this form serves as the official notification that your business falls into one of several protected categories: you operate as a passive entity, your revenue stays below the state's threshold, you have zero Texas gross receipts, you qualify as a Real Estate Investment Trust, or you own a new veteran-owned business. Even though you owe no tax, filing this report fulfills your legal obligation to notify the state of your tax status and keeps your business in good standing with Texas regulatory authorities.
When You’d Use It
You would file Form 05-163 for the 2019 report year if your business meets any of these qualifications during the accounting period your report covers.
Qualification Criteria
- Annualized total revenue of $1,130,000 or less
- Passive entity status under Texas Tax Code Section 171.0003
- Zero Texas gross receipts
- Real Estate Investment Trust qualification under Section 171.0002(c)(4)
- New veteran-owned business status under Section 171.0005
Late and Amended Filing Rules
Late or amended No Tax Due Reports follow different rules. If you miss the May 15 deadline, you must still file, but you'll face a $50 late filing penalty regardless of whether you owe any tax. The Comptroller assesses this penalty automatically on any report filed after the due date.
For amended reports, you might file an amended No Tax Due Report to correct errors or provide updated information, though most amendments involve switching to a different report type—for instance, changing from the No Tax Due Report to the Long Form if you want to claim specific deductions.
Key Rules or Details for 2019
Electronic Filing Requirement
All No Tax Due Reports originally due on or after January 1, 2016 must be filed electronically through the Texas Comptroller's Webfile system or approved electronic submission software. Paper filings require a waiver.
Required Companion Forms
You must also file:
- Form 05-102 (Public Information Report) — for corporations, LLCs, partnerships, etc.
- Form 05-167 (Ownership Information Report) — for associations, trusts, and similar entities
Filing Deadline
The deadline is May 15 unless it falls on a weekend or holiday.
Extensions
You can request an extension before the due date, but it only extends filing—not payment obligations.
Revenue Calculation Rules
If your accounting period is not 12 months, you must annualize your revenue:
- Divide total revenue by number of days in the period
- Multiply by 365
Step-by-Step (High Level)
Step 1: Gather Information
Begin by gathering your business information and financial records for the accounting period your 2019 report will cover.
Step 2: Access Webfile System
Log into the Texas Comptroller's Webfile system using your taxpayer number and credentials.
Step 3: Select the Correct Form
Choose the No Tax Due Report (Form 05-163) for the 2019 report year.
Step 4: Complete Entity Information
Provide:
- Taxpayer number
- Entity name
- Mailing address
- Accounting period dates
Step 5: Identify Qualification
Select the reason your business qualifies for the No Tax Due Report.
Step 6: Enter Financial Details
Input revenue and required financial data accurately.
Step 7: File Companion Report
Submit either:
- Form 05-102 (Public Information Report), or
- Form 05-167 (Ownership Information Report)
Step 8: Review and Submit
Review all entries, electronically sign, and file both forms. Save confirmation for your records.
Common Mistakes and How to Avoid Them
Not Filing Because You Owe No Tax
Many businesses mistakenly believe that owing no tax means they don't need to file anything. This can result in penalties and compliance issues.
Incorrect Revenue Calculation
Failing to annualize revenue properly can lead to incorrect eligibility conclusions.
Missing Companion Report
Submitting Form 05-163 alone does not complete your filing requirement.
Misclassifying Passive Entity Status
Entities must meet strict criteria, including 90% passive income and correct structure.
Attempting Paper Filing
Electronic filing is mandatory unless you have an approved waiver.
What Happens After You File
Confirmation and Processing
After submission, the system generates a confirmation page. Processing typically takes a few weeks.
No Tax Bill Issued
Because you filed a No Tax Due Report, you will not receive a tax bill.
Ongoing Filing Requirement
You must reassess eligibility and file annually.
Possible Follow-Up
The Comptroller may contact you for clarification or corrections.
Maintaining Good Standing
Failure to file in future years can result in forfeiture of your business status.
FAQs
Does filing a No Tax Due Report mean I never have to worry about franchise tax again?
No. Filing this report only applies to one reporting period. Each year, you must determine whether you still qualify based on updated revenue, thresholds, and entity status.
If my revenue was reported incorrectly, what should I do?
You must file an amended report using the correct form. If tax is owed, penalties and interest may apply.
Can I file the No Tax Due Report on paper?
Generally, no. Electronic filing is required unless you receive a waiver.
Do new veteran-owned businesses still need to file?
For 2019, yes. Annual filing is required during the exemption period. This requirement changed in later years.
What’s the difference between zero Texas gross receipts and revenue below the threshold?
Zero Texas gross receipts means no business income from Texas. Revenue below the threshold means total revenue does not exceed $1,130,000.
Which companion form should LLCs file?
Limited liability companies file Form 05-102 (Public Information Report).
What happens if I file late?
A $50 penalty applies automatically. You can request a waiver if you have reasonable cause.
