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Texas Tax Code Section 171.001 imposes franchise tax on each taxable entity that is formed in or doing business in this state. All taxable entities must file completed franchise tax and information reports each year.
The no tax due threshold is as follows: $1,230,000 for reports due in 2022-2023. $1,180,000 for reports due in 2020-2021. $1,130,000 for reports due in 2018-2019.
Tax Rates, Thresholds and Deduction Limits ItemAmountNo Tax Due Threshold$1,180,000Tax Rate (retail or wholesale)0.375%Tax Rate (other than retail or wholesale)0.75%Compensation Deduction Limit$390,0002 more rows
For the 2023 report year, a passive entity as defined in Texas Tax Code Section 171.0003; an entity that has total annualized revenue less than or equal to the no tax due threshold of $1,230,000; an entity that has zero Texas gross receipts; an entity that is a Real Estate Investment Trust (REIT) meeting the
A franchise tax report supporting the amount of tax due (Form 05-158, Texas Franchise Tax Report (PDF), or Form 05-169, Texas Franchise Tax EZ Computation Report (PDF)) must be filed. Thus, when the amount of tax due shown on these forms is less than $1,000, the entity files the report but does not owe any tax.
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The No Tax Due Report is not available for 2024 reports. Effective for reports due on or after Jan.1, 2024, an entity that has annualized total revenue less than or equal to the no tax due threshold of $2.47 million is not required to file a No Tax Due Report.
Franchise Tax A foreign (i.e., out-of-state) taxable entity with annual gross receipts of $500,000 or more from business in Texas has economic nexus even if the entity has no physical presence in this state.
Form 05-163 No Tax Due Report generates automatically if the following occurs: Taxpayer is a passive entity. Taxpayer is a newly established Texas Veteran Owned Business (must be pre-qualified). Taxpayer is a Real Estate Investment Trust that meets the qualifications.

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