Texas Franchise Tax Penalty: How Much You Owe and How to Fix It

Miss the May 15 franchise tax deadline and Texas hits you with a $50 late-filing fee immediately — no warning, no grace period. If your LLC owes tax, you also owe 5% of the tax amount if you're 1–30 days late, or 10% if you're more than 30 days late. The longer you wait, the more you owe, and continued failure can ultimately trigger forfeiture of your LLC's right to operate in Texas.

Step 1: Understand what the penalty is

Texas imposes two separate charges for late franchise tax filings:

1. Flat late-filing fee: $50

This applies to every LLC that misses May 15, no exceptions. Even if your LLC owes $0 in franchise tax — which is true for most small businesses under the $2,650,000 no-tax-due threshold — the $50 penalty still applies the day after the deadline.

2. Percentage penalty on tax owed

If your LLC owes franchise tax, a second penalty is added on top:

• 5% of the tax owed, if you file 1–30 days late
• 10% of the tax owed, if you file more than 30 days late

There is no escalating scale between these two bands — you are either in the 5% window (days 1–30) or the 10% window (day 31+). Filing even one day after the 30-day mark moves you into the higher band.

Note: The Comptroller also charges interest starting 61 days after the due date. Interest is calculated at the rate set by the Texas Comptroller and compounds on the unpaid balance of tax plus penalties.

Step 2: Calculate your penalty

Use this table to estimate your total penalty based on how much tax your LLC owes and how late you are filing:

Penalty estimator

These figures cover the flat fee and percentage penalty only. If your balance goes past 60 days, add interest on top of the totals shown.

Common mistake: Many LLC owners assume that because they owe no tax, they have no penalty exposure. Wrong. The $50 flat fee applies even if your tax liability is $0. If you're in this boat, your total penalty is exactly $50 — stop the clock by filing today.

Step 3: File immediately to stop the penalty clock

Every day you wait potentially moves you from the 5% band to the 10% band, and eventually triggers interest. The single most effective thing you can do right now is file your franchise tax report, even if you cannot pay yet.

Here's how to file online:

1. Go to WebFile at comptroller.texas.gov.
2. Log in with your Texas taxpayer ID (or create an account if this is your first filing).
3. Select your entity and choose the correct form:
   • Form 05-169 (EZ Computation) if your annualized revenue is $20 million or less
   • Forms 05-158-A and 05-158-B (Long Form) if your revenue exceeds $20 million
4. Enter your revenue figures. WebFile calculates the tax owed automatically.
5. Complete the Public Information Report (Form 05-102) in the same session — it's filed alongside the franchise tax report. Missing the PIR can trigger its own forfeiture penalty even if you paid all taxes. See Texas PIR filing requirements for details.
6. Submit and save your confirmation number.

Filing online takes about 15–20 minutes for a straightforward LLC. Paper filing is also accepted but slower — download forms at comptroller.texas.gov/taxes/franchise/forms/.

Step 4: Pay the tax and penalty owed

After filing, pay any balance — tax plus penalty — through WebFile using an electronic check or credit card. Payment is due at the time of filing for overdue returns.

If you owe tax but cannot pay the full amount immediately:

• File anyway. Filing without full payment stops the late-filing penalty from growing. You will still owe the percentage penalty on any unpaid tax, but you avoid additional escalation.
• Contact the Comptroller. The agency may work out a payment arrangement for qualifying businesses. Call the Comptroller's taxpayer services line to discuss your options before the balance grows further.

Do not hold off filing while you scrape together the funds. The filing and the payment are separate actions — filing is the urgent one.

Step 5: Request a penalty waiver if you have reasonable cause

If your late filing resulted from circumstances beyond your control, you can request a penalty waiver from the Texas Comptroller. Qualifying reasons typically include:

• Serious illness of a responsible officer
• Natural disaster affecting your business location
• Fire, theft, or casualty that destroyed your records
• Clear Comptroller error (such as a notice sent to a wrong address)

To request a waiver, write a letter to the Comptroller explaining the circumstances and attach any supporting documentation. Send it to:

Texas Comptroller of Public Accounts
Attn: Penalty Waiver
P.O. Box 149348
Austin, TX 78714-9348

Waivers are granted at the Comptroller's discretion. Do not wait on a waiver decision before paying — pay first, then request a refund of the penalty if the waiver is approved.

Step 6: Set up a reminder so this doesn't happen again

The May 15 deadline is the same every year. Put it on your calendar now with a two-week lead time — April 30 — so you have time to gather records before the deadline arrives.

Ortholo's compliance checker can also send you email reminders ahead of your Texas filing deadlines. It's free and takes two minutes to set up.

Quick reference

Frequently asked questions

What is the Texas franchise tax penalty?

Texas assesses a flat $50 late-filing fee the moment your franchise tax report is overdue. If you owe tax, you also owe 5% of that amount if you are 1–30 days late, or 10% if you are more than 30 days late. The $50 fee applies to every LLC regardless of whether any tax is owed.

Can I get the Texas franchise tax penalty waived?

The Texas Comptroller can waive penalties for reasonable cause — a serious illness, natural disaster, or documented accounting error. You must submit a written request with supporting documentation. Waiver is not guaranteed and interest charges are generally not waivable even when a penalty is forgiven.

What if I can't pay the full penalty right now?

File your report immediately, even if you can't pay. Filing stops the late-filing clock and prevents the penalty from growing. The Comptroller may allow payment arrangements for outstanding balances. Contact taxpayer services to discuss your situation.

Does the penalty apply if my LLC owes $0 in franchise tax?

Yes. The $50 late-filing fee applies to every Texas LLC that misses May 15 — regardless of whether any tax is owed. Most small LLCs fall below the $2,650,000 no-tax-due threshold and owe $0, but they still face the $50 penalty for late filing. The 5%/10% percentage penalty does not apply when no tax is owed, since it's calculated on the tax amount.

What happens if I never fix a Texas franchise tax penalty?

If you ignore late filings and unpaid penalties, the Comptroller can forfeit your LLC's right to transact business in Texas. Once forfeited, officers and directors can become personally liable for the LLC's debts under Texas Tax Code §§ 171.251 and 171.255. Reinstating a forfeited LLC requires paying all back taxes, penalties, and interest — far more expensive than just filing on time. See how to reinstate a forfeited Texas LLC if you're already in this situation.

Last verified: 2026-04-28

Sources: Texas Comptroller — Franchise Tax · Franchise Tax Forms · Texas Tax Code §§ 171.251–171.255