Texas Franchise Tax 2026: The No-Tax-Due Report Was Eliminated — Here’s What Your LLC Files Now
There is a confusing change most Texas LLC owners still have not heard about: the form you used to file for franchise tax — the No Tax Due Report — no longer exists. It was permanently eliminated in 2024 for LLCs under the $2.47 million revenue threshold. What you file instead is different, the deadline is the same, and skipping it still triggers penalties. This article explains exactly what changed, what you are required to file now, and who still owes a full franchise tax return.
“You have to file a TX franchise, but since your LLC had gross revenues less than $2.47 million, you only have to file a public information report.” — Reddit r/tax, comment thread on Texas single-member LLC franchise tax obligations. reddit.com/r/tax/comments/1ci1lqo
That comment captures the new reality — but it leaves out the part that trips people up: most LLC owners do not know the old form is gone, and some are still filing (or trying to file) a form that no longer exists. Others assume that because they owe nothing, they file nothing at all. Both paths lead to compliance problems. Here is the full picture.
What Was the No Tax Due Information Report (Form 05-163)?
Before 2024, the Texas franchise tax system required every taxable entity to file an annual report — even one that owed zero dollars in franchise tax. For entities below the no-tax-due threshold, that meant filing Form 05-163, the No Tax Due Information Report.
Form 05-163 was essentially a zero-balance return. It confirmed to the Texas Comptroller of Public Accounts that the entity existed, was active, and fell below the revenue level where franchise tax was owed. The form asked for basic identifying information — entity name, Texas taxpayer ID, and the period's total revenue figure to substantiate the no-tax-due claim.
For small business owners, it was often a source of confusion. Many found it counterintuitive that a business with no tax liability was still required to file a tax form. CPAs and bookkeepers added it to annual compliance checklists, and tax software included it as a routine step. It was a low-stakes filing — but a required one.
That changed in 2023 when the Texas Legislature passed Senate Bill 3 during a special legislative session. SB 3 made two significant changes to the franchise tax system, both effective starting with the 2024 report year:
- It increased the no-tax-due threshold from $1,230,000 to $2,470,000 in annualized total revenue.
- It permanently eliminated the No Tax Due Report filing requirement for entities below that threshold.
Form 05-163 no longer exists for any current or future reporting period. It cannot be found on the Comptroller’s forms page for 2024 or later. The obligation it represented — to affirmatively report a zero-tax position — is gone.
The 2024 Change: NTD Report Eliminated for Under-$2.47M Entities
The Comptroller’s office announced the changes following SB 3’s enactment with this guidance (paraphrased from official Comptroller publications): “For the 2024 report year and later, a taxable entity whose annualized total revenue is less than or equal to the no-tax-due threshold is not required to file a No Tax Due Report. However, the entity is required to file Form 05-102, Public Information Report or Form 05-167, Ownership Information Report.”
The key phrase is “not required to file a No Tax Due Report.” This is not a temporary waiver. It is a permanent structural change. The form has been discontinued. The obligation to file it has been removed from the Texas Tax Code as it applies to entities under the threshold.
What did not change: the obligation to file the Public Information Report. That annual compliance filing is still required — it just no longer accompanies a No Tax Due Report. It stands alone as the entire filing obligation for entities under the threshold.
What You File Instead: The Public Information Report (PIR)
For a Texas LLC with annualized total revenue at or below the no-tax-due threshold, the only required annual franchise tax filing is the Public Information Report (Form 05-102).
The PIR is a compliance disclosure, not a tax return. It does not calculate or report tax. Its purpose is to provide the Comptroller’s office with current information about who manages and controls the entity. The form asks for:
- The LLC’s legal name and Texas taxpayer ID number
- The names and mailing addresses of all officers, directors, or members (for member-managed LLCs, this means the members; for manager-managed LLCs, the managers)
- A statement of whether any of the managing persons are corporations, LLCs, or other entities (not just individuals)
There is no payment accompanying the PIR for entities under the no-tax-due threshold. No tax calculation is required. No revenue figures are reported on the PIR itself. The filing confirms identity and management structure — nothing more.
The PIR is filed with the Texas Comptroller of Public Accounts, not the Texas Secretary of State. This is a frequent point of confusion because most other states route annual reports through the Secretary of State. In Texas, these are separate filings to separate agencies. Your Secretary of State obligations (periodic filings, registered agent maintenance) are distinct from your franchise tax obligations with the Comptroller.
Filing the PIR online through the Comptroller’s eSystems portal carries no charge. The portal allows entities to pre-fill information from prior-year records, making the process relatively quick for LLCs with stable management structures.
Who Still Files a Full Franchise Tax Return
Not every Texas LLC qualifies for the PIR-only path. Entities with annualized total revenue above the no-tax-due threshold must file a full franchise tax return and pay the applicable tax. The mechanics are more involved:
| Revenue Level | What You File | Form Name | Deadline |
|---|---|---|---|
| At or below $2.47M (verify current year at comptroller.texas.gov) | Public Information Report only — no tax payment | Form 05-102 | May 15 |
| Above $2.47M — retail or wholesale business | EZ Computation or Long Form + PIR — tax rate 0.375% | Form 05-169 or 05-158-A/B + 05-102 | May 15 |
| Above $2.47M — all other businesses | EZ Computation or Long Form + PIR — tax rate 0.75% | Form 05-169 or 05-158-A/B + 05-102 | May 15 |
| New veteran-owned business (first 5 years) | Exemption applies — verify eligibility with Comptroller | Exemption certificate | N/A while exempt |
For entities that do file a full franchise tax return, the PIR is included as a component of that submission — not a separate standalone filing. The full return covers the tax calculation (using the taxable margin approach: the lesser of revenue minus COGS, revenue minus compensation, 70% of revenue, or revenue minus $1 million), and the PIR provides the management disclosure within the same filing package.
Revenue is measured on an annualized basis. If your LLC was only active for part of the year, the Comptroller annualizes the revenue figure before comparing it to the threshold. An LLC that was active for six months with $1.5M in revenue would have an annualized revenue of $3M — above the threshold despite appearing to be under it on a raw basis. This is a nuance worth reviewing with a Texas-licensed CPA if your entity has a partial-year operating period.
Penalties for Missing the Filing
Missing the May 15 deadline — even for an LLC that owes no franchise tax — carries real consequences. The Comptroller’s penalty structure is designed to encourage timely compliance regardless of whether a dollar of tax is owed.
The penalty schedule under Tex. Tax Code § 171.362 works as follows:
- 5% penalty on any tax owed if the report is not filed by May 15 (minimum $50 even if tax owed is zero)
- An additional 5% penalty if the tax remains unpaid 30 days after the Comptroller issues a demand notice
- Interest at the rate of 1.5% per month (compounding) on any unpaid tax from the original due date
- Forfeiture of the right to transact business in Texas for continued non-compliance — this is the most serious consequence for LLCs that owe no tax but simply never file the PIR
The forfeiture risk is the one most LLC owners underestimate. An LLC that forfeits its right to transact business loses the ability to bring suit in Texas courts, may face difficulties with banking relationships, and can be disqualified from contracts that require good standing. Reinstating good standing after forfeiture involves paying all overdue penalties and fees and filing all outstanding reports.
Common Questions About the Change
Was the No Tax Due Report elimination permanent, or is it a temporary waiver?
Permanent. Senate Bill 3 amended the Texas Tax Code to remove the filing requirement for entities below the threshold. The Texas Comptroller discontinued Form 05-163 for all report years starting with 2024. This is not a waiver, a deferral, or a COVID-era accommodation — it is a structural change to the franchise tax statute.
I have been filing Form 05-163 for years. Do I need to do anything to switch?
No action is required to “switch.” Form 05-163 is simply no longer available on the Comptroller’s forms portal for 2024 and later report years. When you log in to file your annual franchise tax obligation, you will find only the PIR (and full return forms if applicable). If your CPA or bookkeeper is still referencing Form 05-163 for current-year filings, that is a signal to verify they are working from current Comptroller guidance.
My LLC had zero revenue last year. Do I still need to file the PIR?
Yes. The PIR filing obligation applies to all Texas taxable entities — including those with zero revenue during the report year. Zero revenue means zero franchise tax owed, but the PIR is a separate compliance disclosure that applies regardless of revenue level. An LLC that was formed but had no activity still files the PIR by May 15.
Does the elimination of the No Tax Due Report affect my Secretary of State obligations?
No. Texas franchise tax and Secretary of State filings are governed by different agencies under different statutes. The Comptroller change (PIR instead of NTD Report) has no effect on any periodic or event-based filing obligations you may have with the Texas Secretary of State. These are separate tracks of compliance.
My LLC is formed in another state but registered to do business in Texas. Does this apply to me?
Yes. Foreign entities (LLCs formed outside Texas but registered to do business in Texas as a foreign LLC) are also subject to Texas franchise tax. The same threshold and PIR-only filing rule applies. If your annualized Texas-apportioned revenue is below the no-tax-due threshold, you file the PIR. If it is above, you file the full return. Apportionment for multi-state entities has additional complexity — consult a Texas-licensed CPA or attorney for guidance specific to your situation.
Where exactly does Tex. Bus. Orgs. Code § 171.0003 fit in?
Tex. Bus. Orgs. Code § 171.0003 defines which entities are subject to Texas franchise tax — the scope of who must file. The threshold and reporting changes from SB 3 were enacted under the Texas Tax Code (Chapter 171), which governs the franchise tax mechanics. Together, these provisions establish both who is a taxable entity and what that entity is required to file. For most small Texas LLCs, § 171.0003 means the LLC is subject to the franchise tax system, and the SB 3 amendments mean the PIR is the only filing required once your revenue clears the no-tax-due threshold. This article is not a substitute for legal or tax advice — a licensed Texas attorney or CPA is the appropriate resource for analysis of your specific entity’s obligations under these statutes.
Can I file the PIR on paper, or must I file online?
Both options are generally available. The Texas Comptroller’s eSystems portal supports electronic filing at no charge and is the most efficient option for most filers. Paper forms are available for download from the Comptroller’s website for those who prefer to file by mail. Electronic filing typically provides faster confirmation that the report has been received and accepted.
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Sources and disclosures: Texas Comptroller of Public Accounts — official SB 3 franchise tax changes and No Tax Due Report discontinuation guidance, comptroller.texas.gov/taxes/franchise/ (reviewed April 2026); Texas Senate Bill 3, 88th Texas Legislature, 3rd Called Session (July 2023) — no-tax-due threshold increase and elimination of Form 05-163; Tex. Bus. Orgs. Code § 171.0003 (scope of taxable entities); Tex. Tax Code § 171.362 (penalty provisions). The no-tax-due threshold stated in this article is $2,470,000 as established by SB 3. This threshold has been adjusted historically and may be updated — verify the current-year threshold at comptroller.texas.gov before filing. Last reviewed April 2026. This article is designed to be educational and is not a substitute for legal or tax advice. Consult a Texas-licensed CPA or business attorney for guidance specific to your situation.