KNOWLEDGE|
(1) |
Corporations (including C corporations and S corporations); |
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(2) |
Limited liability companies (LLCs), including single member LLCs (SMLLCs) and series LLCs; |
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(3) |
Partnerships (including limited partnerships, limited liability partnerships, and general partnerships); |
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(4) |
Professional Associations; |
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(5) |
Business Trusts; |
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(6) |
Joint ventures; and |
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(7) |
Other legal entities. |
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(1) |
Having Physical Presence Activities generally considered to be doing business in Texas with a physical presence include having a business location, employing Texas-based employees, selling goods or services, advertising to Texas customers, entering into contracts, owning or leasing assets, and conducting regular business transactions in the state. |
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(2) |
Having Texas Sales Tax Permit. An entity holding a Texas sales tax permit means that it conducts business activities in Texas and is required to file and pay the Texas franchise tax whether or not the entity is an entity outside of the United States. |
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(3) |
Reaching the Economic Nexus Threshold For each federal income tax accounting period ending in 2019 or later, out-of-state entities in Texas or entities outside the U.S. with annual gross receipts of $500,000 or more from business has economic nexus and is subject to Texas franchise tax, even if it has no physical presence in Texas. |
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(1) |
Public Information Report or Ownership Information Report Only Starting from January 1, 2024, an entity with annualized total revenue less than or equal to the no tax due threshold is not required to file a No Tax Due Report. But the entity still required to file a Public Information Report or an Ownership Information Report. |
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(2) |
EZ Computation An entity, including a combined group or an entity with zero Texas gross receipts, can file using the EZ Computation if its annualized total revenue is or equal to $20 million. Franchise tax rates, thresholds and deduction limits vary by report year. |
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(3) |
Long Form Any entity that does not elect to file using the EZ Computation or has annualized total revenue that is above $20 million must file the Long Form report. The Long Form is suitable for businesses with higher revenue or more complex operations, requiring more detailed financial information. |
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Item |
Amount |
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No tax due threshold |
$2,470,000 |
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Tax Rate (retail or wholesale) |
0.375% |
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Tax Rate (other than retail or wholesale) |
0.75% |
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Compensation Deduction Limit |
$450,000 |
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EZ Computation Total Revenue Threshold |
$20 Million |
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EZ Computation Rate |
0.331% |
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Disclaimer All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage. |
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