Texas franchise tax reporting deadline extended to July 15, 2020


Many of you operate businesses based in Texas. We want to make sure you are aware that the Texas franchise tax return and related payment due date has been changed from May 15, 2020 to July 15, 2020.

The extension is automatic, so nothing needs to be filed to take advantage of the change.

More detail on the extension is available from the Texas Comptroller of Public Accounts. A list of Texas Comptroller phone numbers may be found here. For more information on the Texas franchise tax, go here.

Texas Workforce Commission Update

Due to COVID-19, the due date for first-quarter 2020 tax reports and payments is extended to May 15, 2020. Reports should not be filed before April 16.

Call Sol Schwartz & Associates at 210.384.8000 if you need help. From New Braunfels to Boerne, Kerrville to Corpus Christi, or anywhere else you find yourself, we’re ready to help.

Background

The Texas franchise tax is a state tax imposed on businesses that operate in the state of Texas. It is not an income tax but rather a tax on the privilege of doing business in Texas. The franchise tax applies to various types of entities, including corporations, limited liability companies (LLCs), partnerships, and other forms of business organizations.

Key points about the Texas franchise tax:

  • Entities Subject to the Tax: Most types of legal entities that do business in Texas are subject to the franchise tax. This includes corporations, LLCs, partnerships, and other forms of business entities.
  • No Personal Income Tax: Texas does not have a state personal income tax, making the franchise tax one of the primary sources of revenue for the state.
  • Taxable Margin: The franchise tax is based on a taxable margin, which is essentially the gross revenue of the business minus allowable deductions. Businesses calculate their taxable margin using different methods, and the tax rate is applied to this margin.
  • Rate and Thresholds: The tax rate and thresholds for the Texas franchise tax can vary based on the type and size of the business. The rates and thresholds may be subject to change, so it’s important to check the latest information from the Texas Comptroller of Public Accounts.
  • Filing Requirements: Businesses subject to the franchise tax are required to file an annual franchise tax report with the Texas Comptroller of Public Accounts. The report typically includes financial information used to calculate the taxable margin.
  • Exemptions and Deductions: Some entities and activities may be eligible for exemptions or deductions, so it’s important for businesses to understand the specific rules and requirements that apply to their situation.

For the most accurate and up-to-date information regarding the Texas franchise tax, it is recommended to check with the Texas Comptroller of Public Accounts. Or contact Sol Schwartz & Associates at info@ssacpa.com.