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Tag: Texas franchise tax
Late Texas Franchise-Tax Payment? Interest & Penalty Math
Texas Franchise-Tax Payment Missing the May 15 filing or payment deadline for your Texas franchise-tax can trigger multiple charges: a flat late-filing fee, percentage-based penalties, and accruing interest. Understanding how each is calculated—and how quickly they add up—helps you assess the real cost of a late payment and explore possible waiver options. Applicable Tax Authority […]
E-Z Computation (0.331 %) for SaaS Startups Under $20 M Revenue
E-Z Computation For Texas entities with annualized total revenue of $20 million or less, the E-Z Computation method offers a simplified franchise tax calculation at a flat 0.331 % rate. This option eliminates complex deductions (COGS, compensation, 70% of revenue, or $1 million) in exchange for a straightforward multiplier—ideal for SaaS founders looking to minimize […]
Step-by-Step: Completing the Texas Public Information Report
Texas Public Information Every Texas-taxable entity must file a Public Information Report (PIR) each year, even if no franchise tax is due. The PIR ensures the Comptroller’s office—and the public—has up-to-date ownership and contact information for corporations, LLCs, partnerships, and other entities with Texas nexus. Missing or incomplete PIRs can lead to notices, late-filing fees, […]
0.375 % vs 0.75 %: Which Texas Franchise-Tax Rate Applies to You?
Introduction Texas imposes two different franchise-tax rates—0.375 % and 0.75 %—depending on whether your business is primarily engaged in retail or wholesale trade. Getting the rate wrong can lead to under-payment penalties or over-paying unnecessarily. This guide will help you determine which rate applies, illustrate with examples, and walk you through how to report the […]
Total Revenue vs. Cost-of-Goods: Picking the Best Texas Margin Method
Total Revenue vs. Cost-of-Goods Texas franchise tax is based on a business’s margin, but there are four distinct ways to calculate it. Choosing the method that minimizes your taxable margin can save you thousands. In this post, we’ll compare: Total Revenue × 70% Total Revenue − Cost-of-Goods Sold (COGS) Total Revenue − Compensation Total Revenue […]
New $2.47 M “No-Tax-Due” Threshold Explained (and Who Still Files)
New $2.47 M “No-Tax-Due” Beginning with report years due on or after January 1, 2024, Texas more than doubled its “no-tax-due” threshold—raising it from $1.23 million to $2.47 million. This change, enacted by Senate Bill 3, relieves smaller businesses from owing any franchise tax, but it does not eliminate their filing obligations entirely. In this […]
Texas Franchise Tax: What Founders Must File by May 15v
Introduction Texas imposes a franchise tax on most entities “doing business” in the state. Under Texas Tax Code §171.002, any corporation, LLC, or other taxable entity with revenue above the no-tax-due threshold must file an annual franchise tax report and Public Information Report by May 15, 2025. Founders should understand what forms are required, how […]
Texas Tax Laws: Why Businesses & Individuals Move to the Lone Star State
Introduction Texas has become one of the most popular destinations for businesses and individuals looking to take advantage of its low-tax environment, strong economy, and business-friendly policies. With no state income tax and a relatively simple tax structure, many people and companies are relocating to Texas to maximize financial benefits. This guide explores why Texas […]
Texas vs. Florida: Which State Offers Better Tax Benefits?
Introduction Texas and Florida are two of the most tax-friendly states in the U.S., making them attractive for residents, retirees, and business owners. Both states do not have a state income tax, but they differ in other tax policies, including property taxes, sales taxes, and business taxes. This guide compares Texas and Florida’s tax benefits […]
Texas Franchise Tax: What It Is & How to Calculate It
Introduction Texas does not impose a corporate income tax, but businesses operating in the state may be subject to the Texas Franchise Tax. This tax applies to certain businesses based on their gross revenue rather than their net profits. This guide explains who must pay the Texas Franchise Tax, how to calculate it, and how […]