The Texas franchise tax no-tax-due threshold for 2026 is $2,650,000 in annualized total revenue. If your LLC's revenue falls below this number, you owe $0 in franchise tax — but you still must file a report by May 15 or face a $50 penalty and potential LLC forfeiture. Understanding exactly how the threshold is calculated and what it requires you to file can save you money and keep your LLC in good standing.

What the $2,650,000 threshold actually means

The Texas franchise tax applies to virtually every LLC doing business in Texas, but not every LLC owes money. The Comptroller sets a no-tax-due threshold each year — if your annualized total revenue falls below this amount, your franchise tax liability is $0.

For the 2026 report year (covering calendar year 2025 activity), that threshold is $2,650,000.

Here is the critical distinction most LLC owners miss: the threshold determines how much you pay, not whether you must file. Every Texas LLC must submit an annual filing to the Comptroller by May 15 — there is no exception for small or inactive businesses.

Being under the threshold means:

• You owe $0 in franchise tax
• You file only the Public Information Report (Form 05-102) — no computation form required
• There is no payment due

Being over the threshold means:

• You owe franchise tax on your taxable margin
• You file a computation form (EZ form 05-169 for revenue ≤ $20M, or Long Form 05-158-A/B for revenue over $20M)
• You also file the Public Information Report (Form 05-102)

Common mistake: Many LLC owners assume "no tax due" means "nothing to file." That misunderstanding leads to missed deadlines, $50 penalties, and — if ignored long enough — forfeiture of the LLC's right to operate in Texas.

Step 1: Calculate your total revenue for the threshold test

Before you know which forms to file, you need to determine whether your LLC's annualized total revenue is above or below $2,650,000.

What is "total revenue" for Texas franchise tax?

Total revenue for franchise tax purposes is your LLC's gross receipts from all sources, minus a narrow set of exclusions:

• Returns and allowances
• Flow-through funds collected for third parties (such as sales tax collected from customers)
• Dividends and interest paid by a federal agency

For the vast majority of Texas LLCs — service businesses, retail shops, consultants, rental properties — total revenue equals your gross income before any expense deductions. It is not net profit.

How to calculate annualized total revenue:

1. Sum all gross receipts your LLC received during the accounting period (typically January 1 – December 31, 2025 for the 2026 report year).
2. If your LLC was in existence for less than 12 months during the period, divide your total revenue by the number of days in operation, then multiply by 365 to get the annualized figure.
3. Compare that annualized figure to $2,650,000.

Example: Your LLC opened on July 1, 2025 and earned $800,000 from July through December (184 days). Annualized revenue = ($800,000 ÷ 184) × 365 ≈ $1,587,000 — below the threshold.

Tip: Your Texas taxpayer number (11 digits, different from your federal EIN) is what the Comptroller uses to identify your account. You can verify your account status at the Taxable Entity Search.

Step 2: What to file when you're under the threshold

If your annualized total revenue is below $2,650,000, your only franchise tax filing obligation is the Public Information Report (Form 05-102). No tax computation form is required and no payment is due.

What changed in 2024: Before 2024, LLCs below the threshold filed a separate "No Tax Due Report" (Form 05-163) alongside the PIR. The Texas Comptroller discontinued that form in 2024. If you previously filed a No Tax Due Report, stop — it no longer exists. File only the PIR.

What you need to file the PIR:

• Texas taxpayer number (from the Comptroller, not your federal EIN)
• WebFile Access Code (mailed to your registered agent annually; request a replacement at the Comptroller's website if lost)
• LLC's principal office address
• Registered agent name and current address
• Names and addresses of all current members, managers, or officers

Filing steps:

1. Go to comptroller.texas.gov/taxes/franchise/ and click "File and Pay Franchise Tax."
2. Log in to WebFile (or create an account using your taxpayer number and WebFile Access Code).
3. Select the Public Information Report as your filing type.
4. Complete all required fields and submit. No payment screen will appear — none is due.
5. Save your confirmation number.

This takes about 10 minutes. For a complete field-by-field walkthrough, see our Texas Public Information Report guide.

Step 3: What to file when you're over the threshold

If your annualized total revenue is $2,650,000 or above, you owe franchise tax and must file a computation form in addition to the PIR.

Which computation form do you use?

Most Texas LLCs use the EZ Computation form (05-169), which applies to any LLC with revenue at or below $20 million. It calculates tax as a flat percentage of total revenue, without the more complex margin deduction options available on the Long Form.

Common mistake: Some business owners assume the EZ Computation is less favorable than the Long Form. For many service-based LLCs, the EZ method results in equal or lower tax — consider running both calculations before choosing.

If your revenue exceeds $20 million, use Long Form 05-158-A (the main computation) and 05-158-B (the apportionment supplement). Both are filed through WebFile at comptroller.texas.gov/taxes/franchise/.

For a detailed walkthrough of the EZ form, see our Texas franchise tax EZ computation guide.

Step 4: Meet the May 15 deadline regardless of threshold

The May 15 annual deadline applies to every Texas LLC — whether you're below, at, or above the $2,650,000 threshold. There is no exception.

If May 15 falls on a weekend or holiday, the deadline moves to the next business day. Check the Comptroller's website each year to confirm the exact date.

What happens if you miss it:

• A $50 late filing fee applies immediately
• If franchise tax is owed, a 5% penalty kicks in for filings 1–30 days late
• Filings more than 30 days late face a 10% penalty on tax owed
• Continued failure to file can result in forfeiture of your LLC's right to transact business in Texas
• After forfeiture, officers and members can become personally liable for the LLC's debts under Texas Tax Code §§ 171.251–171.255

If you have already missed the deadline, file immediately and pay any penalties owed. The Comptroller does not automatically waive penalties, but a written waiver request may be considered in limited circumstances.

See our Texas franchise tax penalty guide for details on what the penalties add up to and how to handle a late filing.

Quick reference

FAQ

What is the Texas franchise tax no-tax-due threshold in 2026?

The Texas franchise tax no-tax-due threshold for 2026 is $2,650,000 in annualized total revenue. LLCs with revenue below this amount owe $0 in franchise tax. The threshold is adjusted periodically by the Comptroller — check comptroller.texas.gov each year to confirm the current figure before filing.

Do I still have to file if I'm under the $2,650,000 threshold?

Yes. Every Texas LLC must file an annual report by May 15 regardless of revenue. If you're under the threshold, file only the Public Information Report (Form 05-102) through WebFile — there is no payment and no computation form required. Failure to file still triggers a $50 penalty and can lead to forfeiture even if you owe zero dollars in franchise tax.

How do I calculate total revenue for the Texas franchise tax threshold test?

Total revenue for Texas franchise tax is your LLC's gross receipts from all sources, minus returns, allowances, and a few narrow exclusions like pass-through sales tax collected from customers. For most LLCs it equals gross income before expenses — not net profit. If your LLC operated for less than 12 months, divide total revenue by days in operation and multiply by 365 to annualize.

What happens if my revenue is just over the $2,650,000 threshold?

If your annualized total revenue exceeds $2,650,000, you owe franchise tax and must file a computation form. Most LLCs use the EZ Computation (Form 05-169), which taxes revenue at 0.375% for retail/wholesale businesses or 0.75% for all others. You also file the Public Information Report (Form 05-102). Both are due by May 15 through WebFile at comptroller.texas.gov/taxes/franchise/.

What is the penalty for missing the Texas franchise tax filing deadline?

Missing the May 15 deadline triggers a $50 late filing fee immediately, regardless of whether any tax is owed. If franchise tax is due, a 5% penalty applies for filings up to 30 days late, and 10% for filings more than 30 days late. Persistent non-filing can cause the Comptroller to forfeit your LLC's privileges, after which officers and members may become personally liable for entity debts under Texas Tax Code §§ 171.251–171.255.

Not sure what else your Texas LLC owes?

Most business owners are surprised by how many filing obligations they have. Ortholo's free compliance checker shows you everything you owe, when it's due, and what happens if you miss it — personalized to your entity.

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Last verified: 2026-05-08

Sources: Texas Comptroller — Franchise Tax | Texas Comptroller — PIR/OIR Filing Requirements | Texas Tax Code §§ 171.251–171.255