What Form 05-163 Is For
The Texas Franchise Tax No Tax Due Report (Form 05-163) was a simplified annual filing that certain Texas business entities used to satisfy their franchise tax obligations when they didn't owe any tax. Texas imposes franchise tax as a privilege tax on entities formed in Texas or doing business in the state, but the law recognized that smaller businesses with limited revenue shouldn't face the same reporting burden as larger corporations.
Form 05-163 served as a streamlined alternative to the more complex Long Form (Form 05-158) or EZ Computation Report (Form 05-169). Qualifying entities could file this abbreviated report to confirm they met the threshold requirements without completing detailed margin calculations, deductions, or apportionment formulas. The form essentially told the Comptroller's office: "We're still in business, but our revenue is below the level where we owe any tax."
The form applied specifically to entities whose annualized total revenue fell at or below the "no tax due threshold"—a dollar amount that changed over the years through legislative adjustments. For the 2010 report year, this threshold was $1 million in annualized total revenue. By 2023, it had grown to $1,230,000 before the reporting requirement was eliminated entirely for qualifying low-revenue businesses beginning in 2024.
Even when filing Form 05-163, businesses still had to submit an accompanying Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167), depending on their entity type. The No Tax Due Report didn't eliminate all filing obligations—it simply reduced the complexity of the franchise tax portion.
When You’d Use Form 05-163
Late Filings
Texas franchise tax reports follow an annual cycle with a consistent due date of May 15 each year. If May 15 falls on a weekend or legal holiday, the deadline shifts to the next business day.
If you missed the May 15 deadline, you could still file Form 05-163 late, but penalties would apply.
- The Texas Comptroller assessed a flat $50 late filing penalty
- This applied even when no tax was owed
- The penalty applied regardless of how late the filing was
You could request a penalty waiver separately if you had reasonable cause, such as:
- Natural disaster
- Serious illness
- Death in leadership
Extension Requests
Rather than filing late, entities could request an extension.
- Must be requested on or before May 15
- Extends deadline to August 15
- Provides an additional three months
Late requests are not accepted.
Amended Filings
After filing Form 05-163, you might discover errors or new opportunities.
Entities could amend to:
- Correct mathematical errors
- Change margin computation method
- Claim deductions
- Support a refund claim
You could even amend from Form 05-163 to the Long Form to claim a refund.
Electronic Filing Rule:
Beginning January 1, 2016, amended reports must be filed electronically.
Key Rules or Details for 2010–2023
Revenue Threshold
- Must be at or below the threshold
- 2010: $1,000,000
- 2022–2023: $1,230,000
Annualization Requirement
If your accounting period isn’t 12 months:
- Divide total revenue by number of days
- Multiply by 365
Example:
$750,000 over 108 days = $2,534,722 (disqualified)
Entity Types
Eligible entities included:
- Corporations
- LLCs
- Partnerships
- S corporations
- Trusts
- Joint ventures
Mandatory Information Reports
You must also file:
- Form 05-102 (Public Information Report), or
- Form 05-167 (Ownership Information Report)
Failure to file may result in forfeiture.
Electronic Filing Mandate
- Required starting in 2016
- Paper allowed only with waiver
Combined Groups
- Eligibility is based on total group revenue
- Each member still files its own information report
Step-by-Step (High Level)
Step 1 – Determine Eligibility
Calculate annualized total revenue:
- Include federal income tax revenue
- Subtract allowed exclusions
Step 2 – Gather Basic Information
You’ll need:
- Texas taxpayer number
- Legal entity name
- Report year
- Accounting period
- Ownership details
Step 3 – Complete the Form
Select the correct qualification box:
- Below threshold
- Zero Texas gross receipts
- Passive entity
Provide:
- Total revenue
- Dates
- Basic entity info
Step 4 – Sign the Report
Must be signed by an authorized individual.
- Electronic signatures allowed
Step 5 – Complete the Information Report
- PIR (Form 05-102) or
- OIR (Form 05-167)
Step 6 – Submit Both Forms
- Due May 15
- File electronically (post-2016)
- Mail if approved for paper
Step 7 – Retain Confirmation
- Keep confirmation number or receipt
- Verify status online
Common Mistakes and How to Avoid Them
Miscalculating Annualized Revenue
- Forgetting to annualize
- Including/excluding incorrect items
Missing the Information Report
- Filing only Form 05-163
- Forgetting PIR or OIR
Filing When Not Qualified
- Revenue above threshold
- Should have used Long Form or EZ Form
Confusing Tax Due With Reporting Requirements
- Owing $0 tax ≠ eligible for Form 05-163
Missing Electronic Filing Requirement
- Submitting paper without waiver
Late Filing Despite No Tax Due
- $50 penalty still applies
Incomplete or Unsigned Forms
- Missing signature
- Missing required fields
What Happens After You File
Processing and Verification
- Reviewed by Comptroller
- Eligibility confirmed
Account Status Update
- Updated in public database
Penalty Assessment
- $50 applied if late
Good Standing Maintenance
Maintains:
- Right to operate
- Legal protections
- Business credibility
Secretary of State Coordination
- Officer info shared
- Records updated
No Tax Payment Required
- No payment unless penalties apply
Next Year’s Obligation
- Must file annually
- Form depends on revenue
Terminating Your Entity
To close:
- File final report
- Submit Form 05-359
- Obtain certificate
FAQs
If my entity's total revenue is below the threshold, do I still need to file anything?
Yes. Entities still had to file Form 05-163 and the required information report for 2010–2023. Beginning in 2024, Form 05-163 is no longer required, but the information report still is.
Can I file Form 05-163 electronically, or do I need to mail a paper form?
Electronic filing became mandatory in 2016. Paper filing requires a waiver. Electronic filing provides faster confirmation and is the standard method.
What’s the difference between the Public Information Report and the Ownership Information Report?
The PIR applies to corporations and LLCs and is public. The OIR applies to other entities and remains confidential. Both are required.
My business had no activity and made no money last year. Do I still have to file?
Yes. As long as your entity exists, you must file. Zero activity does not eliminate the requirement.
What happens if I discover I made a mistake on my No Tax Due Report?
You can file an amended report. You may even switch to a Long Form if it results in a refund or correction.
Can I get an extension to file Form 05-163?
Yes, if requested before May 15. The extension moves the deadline to August 15.
Do I need to attach any supporting documentation when I file Form 05-163?
No. However, keep records for at least four years in case of audit.
Sources
All information in this guide comes from official publications and web resources of the Texas Comptroller of Public Accounts, including:
- Publication 98-806 (Franchise Tax Overview)
- Form 05-163 and instructions
- Comptroller website: comptroller.texas.gov
