What Texas Form 05-359 Is For
Texas Form 05-359 is used to request a Certificate of Account Status from the Texas Comptroller of Public Accounts when a taxable entity plans to end its legal existence in Texas or withdraw its registration. The certificate confirms that all franchise tax obligations, franchise tax reports, and required filings have been completed and that no outstanding liabilities remain under the Texas Tax Code.
This certificate is required before most taxable entities can complete a Termination of Corporate Existence with the Texas Secretary of State. Without a valid certificate, the entity is not considered to be in good standing as a corporation. It may remain subject to ongoing filing and tax requirements, even if business operations have already ceased.
Entities commonly required to file include limited liability companies, corporations, limited partnerships, professional associations, tiered partnerships, and specific passive entity structures. Both Texas-formed entities and foreign entities registered to do business in Texas may be required to complete this form.
When You’d Use Texas Form 05-359
An entity uses Texas Form 05-359 after completing all required franchise tax reports and paying any amounts due. This includes filing annual or final reports such as the No Tax Due Report, EZ Computation Report, Long Form Report, Public Information Report, Ownership Information Report, or Tiered Partnership Report, depending on the entity’s structure and total revenue.
The form is typically filed near the end of the termination process. It should not be submitted before all reports are accepted and balances are paid, as premature requests are denied. There is no amended version of this form, because it is a request rather than a tax return. If new liabilities are identified later, the entity must resolve them and submit a new request.
Entities closing during their first year of activity may still need to file required reports marked as premature. Out-of-state entities withdrawing their Texas registration must also request the certificate after resolving all franchise tax obligations connected to their Texas nexus.
Key Rules or Details for 2008
A Certificate of Account Status issued in 2008 is valid only through December 31 of that year. If termination documents are not filed with the Secretary of State before that date, a new request is required.
Some entities cannot request the certificate electronically and must submit their request by mail. These include combined group members, entities under audit, registered limited liability partnerships, and entities with filing histories predating certain system records. Combined groups must clearly identify the reporting entity when filing their reports.
Final franchise tax reports must cover the period beginning the day after the last annual report ended and ending within 60 days of the termination date. Total revenue and gross receipts figures must be calculated correctly for that final period.
Texas Form 05-359 is distinct from tax clearance letters used for reinstatement. It is also separate from sales tax filings, resale certificates, Texas Resale Certificate Form 2008 submissions, Sales and Use Tax Permit Number applications, or requests for Texas Resale Certificates tied to sales tax ID numbers.
Step-by-Step (High Level)
Before requesting the certificate, an entity should complete several required steps.
- File all required franchise tax reports for each open reporting year.
- Submit the appropriate Public Information Report or Ownership Information Report.
- Pay all franchise tax, penalties, and interest so the account reflects a zero balance.
- File a final franchise tax report covering the correct accounting period.
- Confirm account status using the Texas taxpayer number.
Once those steps are complete, the entity submits Texas Form 05-359.
- Submit the request through the Comptroller’s system if eligible, or mail the paper form if required.
- Verify identifying information such as entity name, phone number, and zip code.
- Receive the Certificate of Account Status if all requirements are satisfied.
After the certificate is issued, it must be filed with the Secretary of State along with the appropriate termination form to complete the Termination of Corporate Existence.
Common Mistakes and How to Avoid Them
- Requesting the certificate before filing all franchise tax reports: File every required report first, including any No Tax Due Report and the Public Information Report, to avoid delays in certificate requests.
- Missing timing rules tied to certificate expiration: Coordinate the certificate request with termination filings, especially for certificates issued in earlier years that expire at the end of the year.
- Using an account summary instead of the official certificate: Obtain the official Certificate of Account Status, since informational summaries do not meet statutory termination requirements.
- Miscalculating the final report period: Set the final report to begin immediately after the last annual report period and end within 60 days of ceasing business activity.
- Delaying termination filings after expiration: Submit termination documents promptly to avoid restarting the process due to an expired certificate.
What Happens After You File
The Texas Comptroller of Public Accounts reviews the entity's filing history after submitting Texas Form 05-359. The certificate is granted if all franchise tax obligations have been fulfilled.
The entity is exempt from filing franchise tax reports in the future after the certificate is submitted to the Secretary of State and the termination is approved. However, if problems are later discovered, the state may still evaluate liabilities pertaining to earlier periods.
Other Texas tax form obligations, such as property tax form filings with appraisal districts like the Dallas Central Appraisal District, or unrelated filings pertaining to Travis County property or local compliance matters, are not discharged by termination.
FAQs
Who must file Texas Form 05-359?
Most taxable entities, including corporations, limited liability companies, limited partnerships, and specific real estate investment trust structures, must file the form before terminating or withdrawing from Texas.
Is Form 05-359 a tax return for Texas?
No, it is a request for a certificate, not a tax return. All required franchise tax reports must be filed before submitting the request.
Can the form be filed late?
The form itself does not have a filing deadline; however, it cannot be approved if required reports or payments are submitted after the due date. Expired certificates require a new request.
Does this replace tax clearance letters?
No, tax clearance letters are generally used for reinstatement, while Texas Form 05-359 is used for termination or withdrawal.
Does this form affect sales tax or require a resale certificate?
No, it does not replace resale certificates, Texas Resale Certificate filings, or Sales and Use Tax Permit Number requirements, which are handled separately.
Do I need special software to view the form?
The form and certificate are typically provided as PDF files and can be opened using Adobe Reader.
