Texas franchise tax 2026 update: The no-tax-due threshold is now $2.65 million in annualized total revenue. Most small LLCs and businesses owe $0 — but you still must file the Public Information Report (PIR).
This guide covers everything you need to know for the 2026 report year (due May 15, 2026).
2026 Franchise Tax at a Glance
| Item | 2026 Amount |
|---|---|
| No Tax Due Threshold | $2,650,000 annualized total revenue |
| Standard Tax Rate (most entities) | 0.75% of taxable margin |
| Retail/Wholesale Rate | 0.375% of taxable margin |
| E-Z Computation Rate (revenue ≤ $20M) | 0.331% of total revenue |
| Compensation Deduction Cap | $480,000 per person |
Key Change: Entities at or below the $2.65M threshold do not file a No Tax Due Report. They file the Public Information Report (PIR) or Ownership Information Report (OIR) instead.
Who Must File Franchise Tax?
Most taxable entities doing business in Texas, including:
- LLCs
- Corporations
- Professional Associations
- Limited Partnerships
- Financial institutions
Exemptions include certain nonprofits, some insurance companies, and specific trusts. Check the Comptroller's list for full details.
Even if you owe $0, filing the information report is required to maintain good standing.
How Texas Franchise Tax Works
Texas franchise tax is a privilege tax based on your "taxable margin" (a measure of revenue after deductions).
You calculate margin using one of these methods (choose the lowest tax):
- Total Revenue × rate (after deductions)
- Total Revenue minus Cost of Goods Sold
- Total Revenue minus Compensation (capped at $480k/person)
- E-Z Computation (simple % of total revenue for smaller businesses)
No Tax Due if your annualized total revenue ≤ $2.65M (for 2026).
Important: "Annualized total revenue" is your revenue for the accounting year, adjusted if your period is short or long.
Filing Deadlines and Process
- Due Date: May 15, 2026 (or next business day if weekend/holiday).
- File with the Texas Comptroller via Webfile (recommended) or paper forms.
- Most businesses file the PIR + franchise tax together.
- Extensions available (but interest/penalties may apply).
Forms for 2026:
- Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167)
- Franchise Tax EZ Computation Report (if eligible)
- Long Form if above threshold
Download official forms from comptroller.texas.gov.
Penalties for Non-Filing
- Late PIR: $50+ per month
- Failure to file can lead to forfeiture of limited liability protection and administrative penalties.
- Don't risk it — file even if $0 is due.
Free Tools to Estimate and Comply
- Texas Franchise Tax Estimator — Stress-test scenarios.
- Compliance Checklist Generator — Customized for your entity.
- 2026 Texas Compliance Calendar — All deadlines in one place.
Common Questions for 2026
Do I still file if under $2.65M?
Yes — you file the PIR (or OIR). No separate No Tax Due Report needed.
What if my revenue is close to the threshold?
Run the full calculation. Small changes in how you classify revenue or deductions can matter.
How do I calculate annualized revenue?
Use the Comptroller's instructions or our estimator. It accounts for your accounting period.
Stay Compliant in 2026
- Gather your revenue and expense data early.
- Choose the best margin calculation method.
- File via Webfile by May 15.
- Keep records for at least 4 years.
- Update your registered agent and internal docs as needed.
For the most current official information, always check the Texas Comptroller Franchise Tax page.
This guide reflects rules for the 2026 report year as of latest available information. Tax laws can change — consult a CPA or tax professional for your specific situation.
Download the free 2026 calendar and use our tools to make compliance easy. Request the checklist via the form below or on our tools pages. A specialist can help review your numbers if needed.
Related: How to Form an LLC in Texas | Texas Entity Types | Best LLC Services Comparison