Texas LLC Annual Report: What to File and When (Franchise Tax)
Texas calls it the Franchise Tax Report, but it's the state's equivalent of an annual report. Most Texas LLCs owe $0 in franchise tax — but you still must file by May 15 each year.
Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.
Annual Report at a Glance
Due Date
May 15 annually
Fee
$0 (for most small LLCs under the no-tax-due threshold)
Filing Method
Online via Texas Comptroller's eSystems portal (preferred) or mail
Late Penalty
5% of tax owed if filed 1–30 days late; 10% if more than 30 days late. A $50 penalty applies for non-filers even if no tax is owed.
Sos Filing Url
https://www.sos.state.tx.us
How to File
1
Determine if you owe any tax
Log into the Texas Comptroller's eSystems portal (comptroller.texas.gov). LLCs with annualized total revenue at or below the no-tax-due threshold ($2.47 million for 2024) file a simplified No Tax Due Report and owe nothing. If you exceed the threshold, you'll calculate your margin tax.
2
Gather your financial records
You'll need your LLC's total revenue for the calendar year. For the No Tax Due Report, this is the only figure required. For taxable LLCs, you'll also need cost of goods sold, compensation figures, or the 70% of revenue option — whichever gives you the lowest taxable margin.
3
File online via eSystems
Visit comptroller.texas.gov and log into eSystems. Select 'Franchise Tax' and follow the prompts. The No Tax Due Report takes about 5 minutes. You'll receive a confirmation number when complete.
4
Pay any tax owed (if applicable)
If your LLC owes franchise tax, pay online via eSystems using an ACH bank transfer or credit card. The due date is May 15. Extensions to August 15 are available but you must file the extension request on or before May 15.
5
Keep your confirmation for records
Save or print your submission confirmation. Texas does not send paper acknowledgments. Your filing history is accessible in eSystems if you need proof of compliance for a bank loan or contract.
Ready to file your annual report?
Go directly to the Texas Secretary of State portal.
Failure to file your Texas LLC franchise tax report triggers a $50 penalty plus interest on any unpaid taxes owed to the Texas Comptroller of Public Accounts. More critically, the Comptroller can notify the Texas Secretary of State, resulting in administrative dissolution of your LLC's charter—your business loses its legal right to operate in Texas immediately. This dissolution appears on public records, damaging your business reputation and preventing you from entering contracts or accessing business accounts. Reinstatement requires paying all back franchise taxes, accumulated penalties, interest charges, and a $100 reinstatement fee to the Secretary of State. The franchise tax report (Form 05-102-E for e-filers) is due annually by May 15th. Contact the Texas Comptroller's Franchise Tax Division immediately if you've missed a filing deadline to determine your current penalty status and arrange payment before administrative dissolution occurs.
File your Texas Franchise Tax Report online through the Texas Comptroller's eSystems portal at comptroller.texas.gov using your 11-digit Texas taxpayer number assigned at formation. The annual deadline is May 15th each year; filing after this date triggers a penalty and potential late fees starting at $25.
Most Texas LLCs with less than $10.1 million in revenue file the simplified No Tax Due Report—a 5-minute online submission—rather than the full Franchise Tax Report. This distinction matters because filing the No Tax Due Report costs nothing and satisfies your annual compliance obligation without calculating taxable capital.
However, if your LLC earned over $10.1 million in revenue during the prior year, you must file Form 05-102 (Franchise Tax Public Information Report) with actual tax calculations; this requires accounting records and typically costs $250–$500 in professional preparation if outsourced.
Start by logging into the eSystems portal today using your taxpayer number to determine which form applies to your revenue level, then upload your report before May 15th.
Texas LLCs owe $0 in franchise tax if annualized total revenue stays at or below $2.47 million (the 2026 threshold, adjusted annually). Once you exceed this limit, the Texas Comptroller of Public Accounts taxes 0.375% of your taxable margin for most businesses, or 0.75% for service-based companies not primarily selling goods. This taxable margin calculation often results in an effective rate well below 1% of gross revenue, making Texas significantly cheaper than income-tax states. However, you must file Form 05-102 (Texas Franchise Tax Public Information Report) by May 15 annually—even if you owe $0—or face a $50 minimum penalty plus potential late fees. File through the Comptroller's online portal at comptroller.texas.gov. Understanding your revenue threshold prevents unnecessary tax bills and ensures compliance with Texas's mandatory reporting requirement.
The Texas franchise tax report must be filed by May 15 each year with the Texas Comptroller of Public Accounts. If you cannot meet this deadline, you can request an automatic extension to August 15 by submitting either a "No Tax Due" report or a written extension request before May 15. The Texas Comptroller will not grant extensions beyond August 15 unless you have documented extenuating circumstances requiring formal appeal. Missing the May 15 deadline without an approved extension triggers penalties and potential loss of good standing status with the state, affecting your LLC's legal ability to conduct business in Texas. File your franchise tax report through the Comptroller's online eTax portal or by mail to ensure timely processing and compliance.
Yes, certain Texas LLCs qualify for franchise tax exemptions. Non-profit LLCs, qualifying passive entities (those earning only passive income with no active business operations), and LLCs formed or acquired during the same calendar year as their first franchise tax due date may be exempt. Additionally, LLCs with less than $1,231 in total revenue during the applicable fiscal year qualify for the mandatory filing exemption under Texas Tax Code §171.0905.
For passive entities, you must file Form 05-102, Election by a Passive Entity, with the Texas Comptroller of Public Accounts to formally claim exemption status. This distinction matters significantly: exempt LLCs avoid both the $0–$17,500 annual franchise tax and the associated compliance burden. However, failing to properly document your exemption status exposes your LLC to penalties and back taxes.
Verify your specific exemption eligibility by consulting the Texas Comptroller's franchise tax page or contacting a Texas CPA immediately—misclassification can result in unexpected tax liability.
