Annual Compliance Is Not Optional
If you own an LLC in Texas, you already know that formation involves paperwork. But many new business owners are surprised to learn that the paperwork doesn’t stop after formation—it continues year after year. One of the most critical ongoing obligations is filing your Texas LLC franchise tax and public information report by May 15 each year.
This isn’t optional, even if your LLC is new or hasn’t been profitable. Missing the deadline can result in penalties, interest charges, and potential administrative dissolution of your company. The good news is that the filing process is straightforward once you understand what’s required and when it’s due.
In this guide, we’ll walk you through everything you need to know about Texas franchise tax filing, the public information report, deadlines, penalties, and how to stay organized so you never miss another compliance deadline.
What Is the Texas Franchise Tax?
The Texas franchise tax is an annual tax imposed by the State of Texas on certain business entities, including LLCs, corporations, partnerships, and other business structures. It’s sometimes called the “margin tax” because it’s calculated based on a company’s revenue margin rather than net profit.
Unlike federal income tax, which is based on your actual profit after expenses, the Texas franchise tax is calculated on your revenue minus certain allowable deductions. This means you could owe franchise tax even if your business hasn’t turned a profit yet.
The franchise tax rate is either 0.375% or 0.75%, depending on your business classification and revenue. For most LLCs, the standard rate is 0.375% of taxable revenues. However, retail and wholesale businesses may have a different rate of 0.75%.
The amount you owe is calculated based on your total revenue (with certain exclusions allowed) during the fiscal year being reported. Even small businesses with minimal revenue often owe at least the minimum tax amount, which is currently $261 per year for most business structures.
Who Has to File: Does Your LLC Qualify for the No-Tax-Due Threshold?
Not every Texas LLC has to pay franchise tax, but almost every Texas LLC has to file a return—even if you don’t owe any tax.
Your LLC is exempt from franchise tax if it qualifies for the “no-tax-due threshold,” which means your total revenue for the preceding fiscal year was less than $1.536 million. If you fall below this threshold, you technically don’t owe franchise tax, but you must still file a return claiming the exemption.
There are also other exemptions that may apply to your LLC, including:
- Non-profit organizations that are exempt from federal income tax
- S-corporations that have elected S-corporation status for federal tax purposes (they file a different return)
- Federal agencies and certain government entities
- Insurance companies (which have their own separate tax)
However, even if you qualify for an exemption, you generally still need to file a report with the Texas Comptroller to maintain your LLC’s good standing.
What Is the Public Information Report (PIR)?
The Public Information Report (PIR) is part of the franchise tax filing. It’s a required form that contains updated information about your LLC, including:
- Ownership and management details: Names and addresses of owners and managers
- Business address: Your principal place of business
- Nature of business: What your company does
- Federal tax identification number: Your EIN
- Responsible party contact information: Who should be contacted regarding the filing
The PIR ensures the Texas Comptroller has current information about your business. If you move locations, change ownership structure, or update your management, the PIR filing gives you a chance to update these records with the state.
It’s important to note that the Public Information Report is not the same as an annual report. Some states require annual reports as a separate filing; in Texas, the franchise tax return and Public Information Report combined fulfill your annual reporting obligation.
The May 15 Deadline: What Exactly Is Due and When
Here’s the key date you need to remember: May 15 each year.
By May 15, your Texas LLC must file both:
-
Franchise Tax Return (Form 05-102-E or 05-102-C): This form reports your revenue, calculates the tax you owe, and claims any applicable exemptions.
-
Public Information Report (Form 05-102): This form updates your business information with the state.
Both forms are filed together in a single filing with the Texas Comptroller. When you file online through the comptroller’s website, you’ll complete both the franchise tax return and the public information report in one submission.
The May 15 deadline applies to all LLCs with a fiscal year ending December 31 (which is the standard for most businesses). If your LLC has a different fiscal year, your deadline may differ—it’s always 120 days after your fiscal year ends.
New LLCs formed after the start of the fiscal year may have different filing deadlines depending on when they were formed, so if you’ve just started your LLC, verify your specific deadline with the Texas Comptroller.
How to File with the Texas Comptroller Online
Filing your Texas franchise tax return and Public Information Report online is the fastest and most efficient method. Here’s the step-by-step process:
Step 1: Register for an Account
Visit the Texas Comptroller’s website and create an online account. You’ll need your Federal Employer Identification Number (EIN) and your Texas account number (assigned when you formed your LLC). If you don’t have a Texas account number yet, you’ll need to obtain one before you can file.
Step 2: Log In and Access the Filing Portal
Once your account is set up, log into the Texas Comptroller’s online filing system. Look for the franchise tax filing option for LLCs.
Step 3: Complete the Franchise Tax Return
You’ll be guided through a series of questions about your business revenue, deductions, and exemptions. Have your business financial records ready. You’ll need:
- Total gross revenue for the previous fiscal year
- Cost of goods sold (if applicable)
- Other deductible expenses as defined by the Texas Tax Code
- Federal taxable income information
The system will calculate your tax liability based on the information you provide.
Step 4: Complete the Public Information Report
After the franchise tax return, you’ll complete the Public Information Report with current information about your LLC. Update any ownership, management, or business address information that has changed since your formation.
Step 5: Review and Submit
Review all information for accuracy before submitting. The system will show you your calculated tax amount. If you owe tax, you can pay online using a credit card, debit card, or ACH transfer.
Step 6: Save Your Confirmation
After submission, you’ll receive a confirmation number and filing receipt. Save this for your records.
If you’re not comfortable filing online or need assistance, you can contact the Texas Comptroller’s office directly, or hire an accounting professional or business service to file on your behalf.
Understanding Form 05-102: The Core Filing Document
The Texas Comptroller uses Form 05-102 for the Public Information Report portion and Form 05-102-E (for most entities, including LLCs) for the franchise tax portion when filing online. If your LLC has specific characteristics, you might use Form 05-102-C instead. The online system will guide you to the correct form based on your business structure.
Understanding how to complete Form 05-102 correctly is crucial. For more detailed information on completing the specific forms and understanding each section, you may want to review our guide on how to file Texas LLC Form 205, which covers related compliance forms in detail.
Penalties for Late Filing or Non-Filing
Missing the May 15 deadline carries real financial consequences. Here’s what can happen:
Late Filing Penalty
If you file after the May 15 deadline, you’ll face a penalty of up to $100 per day of delinquency, with a maximum penalty of $18,500 per year. The penalty accrues daily, so every week you’re late, you’re accumulating additional penalties.
Failure to File Penalty
If you don’t file at all, the penalty is even steeper. You can face a penalty of $100 per day of non-compliance, up to $18,500 per year.
Interest on Unpaid Taxes
If you owe franchise tax, interest accrues on the unpaid amount starting from the due date. The interest rate is set quarterly by the Texas Comptroller and is currently quite high—around 8% annually or more.
Administrative Dissolution
If your LLC fails to file for two consecutive years without a good reason accepted by the state, your LLC may be involuntarily dissolved. This means your LLC would cease to exist as a legal entity, and you’d lose the liability protection that the LLC structure provides. Restoring a dissolved LLC requires filing a restoration application and paying fees to bring your status back to good standing.
Difficulty Obtaining Licenses and Permits
Many local and state agencies require proof of current franchise tax filing before issuing business licenses, permits, or renewals. If you’re not in compliance with franchise tax filing, you may be unable to obtain or renew necessary business licenses.
How to Stay Organized Year-Round for Compliance
The best way to avoid penalties and stress is to build a compliance system that works throughout the year, not just in April when the deadline approaches.
Set a Reminder Now
Put May 15 on your calendar right now—not as a casual reminder, but as a critical business deadline. Set alerts starting in March so you have time to gather documents without rushing.
Maintain Detailed Financial Records
Keep meticulous records of your business revenue throughout the year. Record every sale, payment, and transaction. This makes calculating your total revenue for the franchise tax return quick and accurate. Use accounting software like QuickBooks, Xero, or FreshBooks to track income automatically.
Review and Update Your Information Quarterly
Every three months, review whether anything about your LLC has changed—ownership, management, business address, nature of business. Keeping this information current means the Public Information Report portion of your May filing will be accurate and require minimal updates.
Create a Compliance Checklist
Develop a written checklist of all your LLC’s annual compliance obligations:
- Franchise tax return due May 15
- Franchise tax payment due May 15
- Any local business licenses or permits that require renewal
- Any professional licenses or certifications that need renewal
- Registered agent compliance (if you have a registered agent)
Consider Hiring Help
If managing compliance feels overwhelming, hiring a professional to handle this for you can be worth the investment. This might be a tax professional, a business formation service, or a registered agent service. Our comparison of best LLC formation services in Texas includes providers that offer ongoing compliance assistance.
Keep Contact Information for Your Registered Agent Current
If your LLC has a registered agent, they can often help coordinate compliance filings. Make sure your Texas registered agent requirements are met and that your registered agent has current contact information for you so they can notify you of important deadlines or correspondence from the state.
Formation and Compliance Services That Manage This for You
If you’d prefer not to handle franchise tax filing yourself, several business formation and compliance service companies offer annual filing management as part of their service packages.
These services typically:
- Send you reminders as the deadline approaches
- Gather the necessary information from you
- Complete and file your franchise tax return and Public Information Report
- Pay any franchise tax owed on your behalf
- Provide you with filing confirmation and receipts
Services range from basic filing assistance to comprehensive compliance packages that include tax planning, quarterly reminders, and business advice. The cost typically ranges from $100 to $500 per year, depending on the provider and the level of service.
When choosing a service provider, look for companies that specialize in Texas business compliance and have good reviews from Texas LLC owners. Many offer a free consultation, so you can ask questions before committing.
Frequently Asked Questions
When is the Texas LLC franchise tax due each year?
The Texas franchise tax return and Public Information Report are due by May 15 each year for LLCs with a December 31 fiscal year. If your LLC has a different fiscal year, the deadline is 120 days after your fiscal year ends.
What is the no-tax-due threshold for Texas LLCs?
If your LLC’s total revenue for the previous fiscal year was less than $1.536 million, you may not owe franchise tax. However, you still must file a return claiming the exemption. The threshold is adjusted annually for inflation.
Is the Public Information Report the same as an annual report?
In Texas, the Public Information Report (filed as part of your franchise tax return) serves as your annual report for LLC compliance purposes. Some states require separate annual report filings, but Texas combines this requirement with the franchise tax filing.
What happens if I miss the May 15 Texas franchise tax deadline?
Late filing penalties accrue at up to $100 per day, with a maximum of $18,500 per year. If you fail to file for two consecutive years, your LLC may be involuntarily dissolved. You’ll also accrue interest on any unpaid tax, and you may have difficulty renewing licenses and permits.
Do new LLCs have to file a franchise tax return in their first year?
New LLCs formed during a fiscal year generally have a deadline to file their first franchise tax return by May 15 of the following year. However, the specific deadline depends on when the LLC was formed. New LLCs should verify their filing deadline with the Texas Comptroller. The no-tax-due threshold still applies; if your first-year revenue is below $1.536 million, you may not owe tax, but you still must file a return claiming the exemption.
Conclusion: Put May 15 on Your Calendar Now
Filing your Texas LLC franchise tax return and Public Information Report by May 15 is not optional—it’s a legal requirement that keeps your LLC in good standing with the state. Missing this deadline invites penalties that can quickly become expensive and creates legal complications for your business.
The filing process is straightforward, especially if you file online through the Texas Comptroller’s website. What matters most is that you stay organized throughout the year, gather your financial records promptly, and submit your filing before the deadline.
If you’re not sure whether you’ve been complying with this requirement or if you’ve missed previous deadlines, contact the Texas Comptroller’s office as soon as possible. The sooner you get into compliance, the sooner you can avoid additional penalties and protect your LLC’s legal status.
Mark May 15 on your calendar now. Set it as an annual reminder. Whether you file yourself, hire a tax professional, or use a compliance service, make it a priority. Your LLC’s good standing—and your peace of mind—depends on it.