Final Franchise-Tax Filings
When closing your Texas LLC, the final franchise-tax filing is critical to avoid penalties, interest, or future liens. This “final report” notifies the Comptroller that your business has ceased operations and ensures no outstanding tax liabilities remain.
Relevant Tax Code References
- Texas Tax Code §171.255(d) requires a final franchise-tax report and payment upon dissolution.
- Texas Tax Code §171.101(c) defines the due date for franchise-tax reports as May 15 of each year.
- By comparison, IRC §6072 mandates federal final returns by the 15th day of the third month after termination; Texas aligns its annual calendar requirements similarly.
Relevant Forms & Requirements
- Form 05-158 (Franchise Tax Report and Payment) – check the “Final Report” box.
- Form 05-230 (Request for Account Status) – obtain a zero-balance certificate.
- WebFile Enrollment – if your LLC is not already signed up, register for WebFile to file electronically.
Detailed Example
XYZ Ventures, LLC plans to close on June 30, 2025. They must:
- File their final Form 05-158 by May 15, 2026 (covering the Jan 1–Jun 30, 2025 period).
- Their computed franchise tax is $1,200, plus $36 penalty (3%) and $24 interest (2% annualized).
- After payment of $1,260, they request an Account Status letter to confirm zero balance.
Step-by-Step Guide
- Determine Final Tax Period
- Identify the portion of the calendar year your LLC operated (e.g., Jan 1–Jun 30, 2025).
- Compute Franchise Tax
- Use the lesser of margin calculation methods (e.g., 0.375% of total revenue).
- Access WebFile
- Log in at comptroller.texas.gov/e-file/webfile/.
- If not enrolled, complete the one-time setup.
- Complete Form 05-158
- Enter operating dates, revenues, tax due, and check “Final Report.”
- Pay Tax, Penalties & Interest
- Remit via ACH (no fee) or credit card (convenience fee applies).
- Request Account Status
- Submit Form 05-230 through WebFile; download the Certificate of Account Status.
- Confirm Zero Balance
- Ensure the Account Status certificate shows $0 due after your final payment.
Conclusion
Timely filing of your final franchise-tax report and securing a zero-balance certificate seals your LLC’s tax obligations and prevents future compliance headaches. Treat the process as a key closing step when shutting down operations.
Schedule a Consultation
For expert guidance on your final Texas franchise-tax filings, schedule a meeting with our CPA, Anshul Goyal:
https://calendly.com/anshulcpa/
Disclaimer
This blog offers general guidance on filing your final Texas franchise-tax report and does not replace professional advice. Always verify the latest fees and deadlines with the Texas Comptroller. For tailored assistance closing your Texas LLC, consult Anshul Goyal, CPA EA FCA—a licensed CPA in the United States and Enrolled Agent with IRS practice rights—who specializes in Texas state tax compliance.
About Our CPA
Anshul Goyal, CPA EA FCA, has over 12 years of expertise in Texas franchise-tax regulations, electronic filings, and entity closures. He helps businesses navigate final compliance steps smoothly and efficiently.
Top 5 FAQs
1. When is the final report due?
May 15 following the year your LLC ceased operations.
2. Can I file the final report after dissolution?
Yes—report for the calendar year portion you operated, even if you dissolve mid-year.
3. Is there a penalty for late final filings?
Yes—a 5% penalty of the tax due per Texas Tax Code §171.101(d).
4. Do I need a separate “dissolution” filing with the Comptroller?
No—the “Final Report” checkbox on Form 05-158 suffices.
5. What if I miss the final report deadline?
You’ll incur penalties, interest, and potential liens; file as soon as possible.