Educational Resource — June 2026 Texas franchise tax thresholds are adjusted annually. Verify the current year's threshold at the Texas Comptroller's website (comptroller.texas.gov) before filing.

What Is the Texas Franchise Tax?

Texas has no personal income tax, but it does levy a franchise tax (also called the "margin tax") on most business entities that conduct business in Texas — including LLCs. The franchise tax is calculated based on a business's "taxable margin," which is essentially a measure of its revenue minus certain deductions.

The good news for small LLCs: Texas has a generous No Tax Due threshold. Most small businesses never actually owe any franchise tax — but they still have a filing obligation.

What Is the No Tax Due Report?

The No Tax Due Report (formally "Texas Franchise Tax No Tax Due Information Report") is a simplified annual filing that replaces the full franchise tax return for entities below the revenue threshold.

Instead of calculating taxable margin and tax owed, you simply certify that your LLC's total annualized revenue is below the No Tax Due threshold — and the filing is complete. No tax payment is required.

Filing Is Still Required

Even though the report results in zero tax owed, you must still file the No Tax Due Report with the Texas Comptroller by May 15. Skipping the filing — even when you owe nothing — triggers a $50 late penalty and can eventually lead to forfeiture of your LLC's Texas operating rights.

2026 No Tax Due Threshold

The 2026 franchise tax No Tax Due threshold is $2,470,000 in total annualized revenue (based on 2025 revenue for the 2026 report). This threshold is adjusted annually by the Texas Comptroller for inflation.

  • If your LLC's total revenue (not profit) was below $2,470,000 in 2025: File the No Tax Due Report. Owe $0.
  • If your LLC's total revenue was at or above $2,470,000 in 2025: File the standard franchise tax report and calculate your tax based on taxable margin.

When Is the Texas Franchise Tax Due?

  • Annual deadline: May 15 of each year (for the prior year's revenue)
  • 2026 due date: May 15, 2026
  • Extension: A 90-day automatic extension is available if you pay an estimated amount by May 15. This extends the filing deadline to August 13, 2026. If 90% of the tax owed has been prepaid, additional extension to November 15 may be available.

How to File the No Tax Due Report Online

  1. Go to the Texas Comptroller's e-file system: comptroller.texas.gov/taxes/franchise/
  2. Log in with your Texas WebFile number (on your franchise tax welcome letter from the Comptroller)
  3. Select "No Tax Due" report for the reporting year
  4. Enter your LLC's total revenue for the prior year
  5. Confirm your registered agent and principal office information
  6. Submit the report — no payment required if below threshold

The entire process typically takes under 10 minutes for most small LLCs.

Penalties for Not Filing

  • Late filing penalty: $50 per report filed after the May 15 deadline
  • Continued non-filing: The Comptroller will send notices. If ignored, the LLC can be placed "not in good standing."
  • Forfeiture: After continued failure, the Comptroller can forfeit the LLC's right to conduct business in Texas. A forfeited LLC cannot maintain lawsuits in Texas courts and may lose liability protection.
  • Reinstatement: Reinstating a forfeited LLC requires paying all past-due reports, penalties, and a reinstatement fee.

Official Sources

Frequently Asked Questions

Texas No Tax Due Report FAQs

For 2026 reports (based on 2025 revenue), the Texas franchise tax No Tax Due threshold is $2,470,000 in total annualized revenue. LLCs and other taxable entities with total revenue below this threshold owe no franchise tax and file a No Tax Due Report instead of a full franchise tax return.
Yes. Even if your LLC is below the No Tax Due threshold and owes nothing, you must still file the No Tax Due Report with the Texas Comptroller by the due date. Failure to file can result in penalties and eventually forfeiture of your LLC's right to do business in Texas.
The Texas franchise tax report (including the No Tax Due Report) is due May 15 each year for most LLCs. If May 15 falls on a weekend or holiday, the deadline moves to the next business day.
Yes. Failure to file by the May 15 deadline results in a $50 late filing penalty. If an LLC fails to file for multiple years, the Texas Comptroller can forfeit the LLC's right to conduct business in Texas, which can invalidate contracts and eliminate liability protection.
For LLCs above the No Tax Due threshold, the standard franchise tax rate is 0.75% of taxable margin (the portion of revenue that the tax applies to). Retail and wholesale businesses pay 0.375%. The "EZ Computation" method applies a 0.331% rate on total revenue for qualifying entities.

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