Overview

Texas has a generous threshold for when franchise tax is payable from. A business must earn over $1,180,000 before they pay any tax.

Franchise Taxes are handled by the Texas Comptroller of Public Accounts. Payments can be made directly or when filing using approved software.


Who needs to pay Franchise Taxes in Texas?

All Corporations, LLCs, LPs, PLLCs and PCs need to pay franchise taxes in the State of Texas.  Sole proprietorships are not required to pay franchise taxes in Texas.


How are Franchise Taxes calculated in Texas?

For 2020-21, the rates for earnings over $1,180,00 are 0.375% (retail or wholesale), 0.75% (all other), 0.331% EZ computation rate. EZ Computation threshold is earnings of $20 million. The compensation deduction limit is $300,000.


How often do businesses need to pay Franchise Tax in the State of Texas?

Franchise taxes in Texas State needs to be paid annually.


When is the due date to pay Franchise Tax calculated in Texas?

The due date to pay Franchise Tax in Texas is May 15.

LPs only have to file periodic reports not more than once every four years, but any tax payment is still made annually.