Introduction
Starting a Public Benefit Corporation (PBC) in Texas? You may be surprised to learn that tax-wise, it’s treated just like any for-profit corporation.
In this blog, we explore the 2025 franchise tax implications for Texas PBCs and correct the misconception that socially driven businesses pay less.
Texas Legal References
- Texas Business Organizations Code §21.951 – Public Benefit Corporations
- Texas Tax Code §171.001–171.0005 – Franchise Tax rules
- Texas Administrative Code §3.586 – Filing rules for corporations and LLCs
What Is a Texas PBC?
A PBC is a for-profit entity formed with a specific social or public good mission in its charter.
Key features:
- Must identify its public benefit in the certificate of formation
- Board must balance profit + mission
- Must deliver biennial public benefit report to shareholders
But: It is still a taxable entity under franchise tax law.
Tax Treatment of a PBC in Texas
Just like C-Corps or LLCs, a Texas PBC must:
- File an annual Franchise Tax Report
- Submit a Public Information Report (PIR)
- Pay franchise tax unless under the $2.47M no-tax-due threshold
There is no tax deduction or exemption for being a Public Benefit Corporation.
Example: Austin-Based ClimateTech PBC
Example: EarthImpact Inc. is a Texas PBC launched in 2025 with:
- $1.2M revenue
- Filed Certificate of Formation stating benefit: “Decarbonizing urban logistics”
Tax treatment:
- Since revenue < $2.47M, no tax due
- Still required to file Franchise Tax Report + PIR
Step-by-Step: Filing Taxes for a Texas PBC
- Register PBC with Texas SOS
Include public benefit language in formation documents. - Track Annual Revenue
Compare to the $2.47M no-tax-due threshold. - File Annual Franchise Tax Report
Use WebFile or eSystems; even if tax due = $0. - Submit Public Information Report (PIR)
Names of officers, address, and ownership structure. - Maintain Biennial Benefit Report (internally)
This is not required by the state, but by shareholders.
Conclusion
Texas PBCs serve a greater purpose—but they aren’t treated differently by the tax code. They owe franchise tax just like any other for-profit entity, unless exempt by size.
Being mission-driven doesn’t reduce compliance requirements.
Call to Action
Thinking of forming a PBC in Texas?
Book a call with Anshul Goyal, CPA, EA, FCA to:
- Understand full franchise tax obligations
- File formation papers with correct benefit language
- Stay compliant with PIR and revenue thresholds
Build impact—without tripping over tax pitfalls.
https://calendly.com/anshulcpa/
About Our CPA
Anshul Goyal, CPA, EA, FCA
Anshul brings 15+ years of U.S. and international tax experience. He specializes in helping online sellers, foreign founders, and U.S. residents with IRS and multi-state compliance. Known for his deep knowledge in Shopify and Amazon seller tax strategy, Anshul has helped hundreds of entrepreneurs minimize taxes and scale legally.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified tax professional regarding your individual tax situation.
Top 5 FAQs (2025)
1. Do PBCs in Texas pay franchise tax?
Yes, same rates and rules as any for-profit corporation.
2. Is there a tax benefit for being a PBC?
No, Texas law does not offer special tax breaks.
3. Can a PBC qualify for no-tax-due threshold?
Yes, if annual revenue is under $2.47M.
4. Does Texas require public benefit reports?
Not filed with the state—but must be given to shareholders.
5. Can a PBC be an S-Corp?
Yes, PBCs can elect S-Corp status for federal and state filings.