Under the Texas Tax Code, corporations, limited liabilities, business institutions, and other entities enumerated under the said code that are subject to franchise tax are required to file a Texas franchise tax report before the office of the Texas Tax Comptroller.
A Texas franchise tax report must be signed by any officer, director or persons having the authority to prepare and file the same. Along with the franchise tax report, a public authority report must also be submitted to inform the office of the tax comptroller the names of the persons who are authorized by the corporation to sign the Texas franchise tax report.
The deadline for submission of the franchise tax report for all corporations subject to such tax is the 15th of May of each year.
In Texas, franchise tax report may be submitted in three forms: 1) The no tax due form; 2) The E-Z computation form; and 3) the long form.
No tax due form is to be filed by the corporation that: 1) is categorized under the Texas tax code as a passive entity; 2) does not have a tax margin that exceeds $1,000.00; 3) has a Texas gross receipt total equivalent to zero; 4) engaged in real estate investment trust that passes the qualification under the Tax Code.
A Texas franchise tax report in E-Z computation form is to be submitted by a corporation that has annual total revenue of less than $10 million. This form does not include on its report the tax credits and the business losses carryover.
The Long form of Texas franchise tax report is filed by corporations who are not covered under the no tax due form or the E-Z computation form, or if covered, still opted for to file the long form.
Corporations that are engaged in manufacturing, installation and selling of solar energy devices and wind energy devices are exempted from filing the Texas franchise tax report because they are exempt from paying franchise tax, provided they meet the qualification set forth under the Texas tax code.
For corporations that did not have annual total revenue of more than $1million chartered or doing business in Texas, franchise tax report is not needed to be filed as they are considered exempted in the revised Texas franchise tax system.
A corporation who wishes to be dissolved or cease from doing business in Texas must file a final Texas franchise tax report before it can completely be declared as dissolved or not doing business.
Texas, recently, adopted the “margin” taxing for their franchise tax collection. This made the preparation and the filing of the Texas franchise tax report easier for the corporation. In addition, Texas encouraged the online filing of the franchise tax report. Corporations may purchase and install computer programs that assist in filing its Texas franchise tax report. These programs help the corporation to easily discover and correct any mistakes in its report.
Further, with the introduction of the online filing and payment of the Texas franchise tax report, tax collection in Texas is now more efficient and effective.