What Texas Form 05-359 (2013) Is For
Texas Form 05-359 (2013) 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 or registration in the State of Texas. This certificate attests to the entity's compliance with all Texas franchise tax and associated tax filing requirements.
The Texas Secretary of State requires the Certificate of Account Status before approving the termination of corporate existence, withdrawal of registration, administrative dissolution reversal, or certain mergers and conversions. Without tax clearance, the Secretary of State cannot finalize changes to an entity’s legal status under the Texas Tax Code.
When You’d Use Texas Form 05-359
When a business owner wants to officially terminate or change the legal status of a taxable entity registered in Texas, they must complete Texas Form 05-359. The form is for corporations, limited liability companies, limited partnerships, limited liability partnerships, and other taxable entities, including those taxed as corporations.
This form would be utilized in the following circumstances:
- A Texas LLC or corporation is terminating its existence with the Texas Secretary of State.
- A foreign entity is withdrawing its registration from the State of Texas.
- A taxable entity is merging or converting in a way that ends its current legal status.
- A business is addressing administrative dissolution and needs to confirm the good standing of its corporate status.
Requests for tax clearance in court proceedings, underwriting agreements, or transactions involving real estate, business debts, or federal tax matters are also made using this form.
Key Rules or Details for the 2013 Tax Year
Texas Form 05-359 is for the 2013 tax year and follows the Texas Franchise Tax rules that were in place at the time. The Texas Comptroller of Public Accounts will only give you a tax clearance certificate if you have filed all of your tax returns and paid all of your taxes.
Key rules to understand include the following requirements:
- All franchise tax reports and tax reports must be filed through the entity’s ending date.
- Any outstanding sales and use tax, sales tax, or use tax obligations must be resolved through the appropriate tax accounts.
- A final Texas Franchise Tax Report must be filed if the entity ceased business operations before the end of the tax year.
- Entities must file a public information report using Form 05-102 or an ownership information report using Form 05-167, depending on entity type.
To calculate the accurate franchise tax liability, total revenue and gross receipts must be annualized if the final report covers a brief time period. Depending on their eligibility, entities may use the Long Form Report, E-Z Computation, Cost of Goods Sold, or Compensation Deduction methods.
Step-by-Step (High Level)
Step 1: Complete All Required Tax Filings
The business owner must file all of the Texas Franchise Tax Reports and any other tax returns that are still due, as required by law. This includes sending in a final report that covers all activities from the start date of the last filed report to the end date of the report.
Step 2: Pay All Outstanding Taxes and Fees
Before sending in Form 05-359, all tax payments must be made in full. This includes franchise tax, penalties, interest, sales and use tax, and any other debts that the Comptroller of Public Accounts is in charge of.
Step 3: Submit Texas Form 05-359
The Texas Comptroller of Public Accounts receives the filled-out Form 05-359. While some reporting entity types—such as combined groups and entities with unresolved audits—must submit the form by mail, eligible entities may use the franchise tax Webfile.
Step 4: Receive the Certificate of Account Status
Once the Comptroller verifies compliance, the Certificate of Account Status is issued. This document confirms that the entity meets Texas Franchise Tax Account Status requirements and has satisfied all filing requirements.
Step 5: File Termination Documents With the Secretary of State
Together with the necessary filing fee and the relevant termination or withdrawal documents, the Certificate of Account Status must be submitted to the Texas Secretary of State. This step completes the withdrawal of registration or termination of corporate existence.
Common Mistakes and How to Avoid Them
- Requesting Form 05-359 before filing final reports: File and ensure processing of the final Franchise Tax Report before requesting the certificate.
- Overlooking required information reports: Submit Form 05-102 or Form 05-167 as needed, so tax clearance is not delayed.
- Missing the certificate validity deadline: File termination documents with the Texas Secretary of State before the certificate expires at the end of the issued tax year.
- Forgetting to close other tax accounts: Close sales tax, use tax, and employer withholding accounts separately because Form 05-359 does not close them.
- Incorrect total revenue or gross receipts calculations: Reconcile revenue figures to supporting records so the Comptroller does not reject the request or assess additional tax.
What Happens After You File
The Texas Comptroller of Public Accounts reviews the Franchise Tax Account Status of the business after Form 05-359 is submitted. The Certificate of Account Status is issued to the entity and made available upon meeting all requirements.
The business must then submit paperwork to the Texas Secretary of State to officially dissolve its corporate existence or withdraw. The entity remains legally active and must continue to file until the Secretary of State processes the filing.
The State of Texas may still send notices after termination if records aren't up to date or if there are still tax problems that need to be fixed. It's essential to retain copies of all tax clearance certificates, tax filings, and termination documents for future reference.
FAQs
Is Texas Form 05-359 the same as the Certificate of Account Status?
No, Form 05-359 is the request submitted to the Texas Comptroller, while the Certificate of Account Status is the document issued after approval.
Do limited liability companies need to file Form 05-359 to terminate?
Yes, Texas LLCs must obtain a Certificate of Account Status before filing termination documents with the Texas Secretary of State.
Does this form close federal tax obligations?
No, Texas Form 05-359 only addresses Texas tax clearance and does not affect federal tax filings or obligations.
What happens if an entity has unpaid sales tax?
The Certificate of Account Status will not be issued until all sales and use tax liabilities are resolved and the tax payment is complete.
Does Texas Form 05-359 apply to other states?
No, this form applies only to entities registered in the state of Texas. Other states, such as California, have separate tax clearance processes.
