For Texas owners. The month still ends on the tenth.

The same tenth, on a video call.

Houston, Austin, Fort Worth, the Panhandle, the Gulf, and the Hill Country all meet the practice by video, because the practice itself sits in Dallas. We are all Texans. A rodeo, Friday night lights, a shoulder of bluebonnets, an H-E-B run, and a Buc-ee's stop can stay in your week. None of those is a city we say we live in, and none of them is a room you have to visit before the month can close.

Wherever you are, the finished page is still profit and loss for the month that just ended, a balance sheet dated the last day, and one plain line about what moved. State papers sit next to that page. The page is still the thing a lender, a preparer, or you can point at.

The tenth is what the state report reads.

Doing business through a company in Texas carries a yearly privilege tax the Comptroller calls the franchise tax. No revenue number is copied onto that report until the tenths for the year are finished. A person who stayed a sole owner, and never formed a company, is generally outside this filing. Forming a limited liability company, even with a single owner, puts the company inside it.

Who files, and who does not, is written in Publication 98-806 rather than invented on this page. Filers there include corporations, one-member and series limited liability companies, banks, S corporations, partnerships, trusts, professional associations, joint ventures, and the other legal entities that booklet names. Left off are a sole proprietorship that never became a limited liability company, a general partnership whose owners are all people unless the partnership is a limited liability partnership, entities the tax code exempts, and the passive entities the booklet already lists. A category missing from that booklet stays a gap.

Margin is the base. The shorter EZ computation is available only when the company qualifies and then chooses it. All four margin counts begin at total revenue, and that starting figure is federal revenue after the exclusions the statute allows. An open month makes the starting figure soft, which is why the tenth is the work that happens before the report.

Four ways to count margin, after the month has closed.

The four counts are a choice of one, not a stack to add up. Keeping seventy percent of revenue and stopping is one count. Removing only the cost of goods is another. Removing pay is a third. Removing a flat 1,000,000 dollars, allowed since the first of January 2014, is the fourth. The year keeps the count that fits.

For an ordinary trade, goods cost is the spend to acquire or produce tangible property the company sells, and real property sold in that same trade is treated the same way. A service company with nothing tangible to sell often has an empty subtraction there. The statute holds the industry exceptions. We will not cook up a goods number so the line looks busy while the month is still being named.

Pay that can be removed is W-2 wages together with cash to officers, directors, owners, partners, and employees, and it can include net distributive income to a natural person across the twelve months the tax uses. Health coverage, retirement, and workers compensation may stay in that figure. A 1099 paid for contract labor is left out, and so are payroll taxes the company pays because it is the employer. On the 2026 and 2027 reports the cap for any one person is 480,000 dollars.

Companies that file as one combined group must share a single margin method. Texas gross receipts are what then split that margin. An S corporation can share the Texas report with a limited liability company even though the federal forms differ. Each of those companies still needs its own closed months before the shared method is picked.

A year with no tax is not a year with no paper.

Revenue that stays at or under 2,650,000 dollars for a 2026 or 2027 report leaves the franchise tax at zero, and the long tax report is not the paper that goes out. Short information papers can still be required. A tax bill of zero still leaves the year open until those short papers and the tenths are done. Closed months are how we tell whether the company stayed under that line.

Public information goes on Form 05-102, signed by an officer, a director, or someone the company has already authorized to sign. Ownership information goes on Form 05-167, and those ownership lines stay confidential. A combined group does not let one member file the information paper for the rest. Each member with a Texas charter, or with nexus, sends its own. That paper shares the franchise due day, and a zero-tax year does not cancel it.

The Comptroller already excuses some entities from the information paper. Exempt entities are on that list. So are entities that have no Texas charter and no Texas nexus, passive entities, and a qualifying new veteran-owned business through its first five years. Officer changes wait for the next annual paper unless an amended paper is filed because of an error or a critical need. Changing the registered agent is a Secretary of State filing, kept off the monthly close. Form 05-102 has no place for that update, and neither does the monthly page.

Rates, the May date, and what a late report costs.

Retail and wholesale, on the 2026 and 2027 reports, are taxed at 0.375 percent. Every activity outside those two is taxed at 0.75 percent. EZ opens only after revenue has been annualized, and only while that annualized revenue is still 20,000,000 dollars or less. Inside that band the EZ rate is 0.331 percent, and choosing it means the margin removals are given up.

Past the no-tax line, the long form is what we prepare if EZ is not the choice, and it is also what we prepare when a margin removal has to be shown. May 15 is the aim. When that date falls on a weekend or a holiday, use the following day state offices actually open. Shifted days in August and November are read on the live extensions page in the year they happen. This site does not memorize one.

More time is a payment, not a free month. One allowed payment matches all of the tax from the prior report. The other matches nine tenths of the tax you are about to compute. Whichever payment you pick has to be a number the closed months can actually show. A first report, for a company that became subject only in the prior year, cannot use the whole of a prior year it does not have. Companies outside mandatory electronic transfer ask through Webfile or on Form 05-164, with November 15 as the extended day.

Electronic transfer becomes mandatory once the prior state fiscal year showed at least 10,000 dollars of this tax. August 15 is the first extra day once electronic transfer is mandatory, and November 15 is the later one. Companies at 500,000 dollars or higher request that extra time only through TEXNET, using code 13080, and they leave Form 05-164 unsent. For that transfer the prior business day is the real deadline, and the cutoff that evening is eight, Central time.

A report that shows up after the due day costs 50 dollars, including a report with no tax, and including a report that is filed later anyway. The first thirty days of a late tax payment add 5 percent. Stay late past those thirty days and the penalty on the tax itself steps up to 10 percent. Interest may start once sixty-one days have passed, at the percent the Comptroller interest page shows on that day. The percent is not frozen onto this site.

Leaving Texas nexus starts a sixty-day clock for the final report. If the extension payment rules are met, that final report may arrive as many as 45 days after the day it first fell due. Research-credit filing changed in January 2026, so the credit is read on the franchise home page rather than restated beside the tenth. Court work on the tax belongs with a lawyer. Forfeiture under the statute can remove the ability to sue or to defend and can put personal liability on some debts, while financial institutions sit outside that forfeiture. This page is not the case. It is the months the numbers come from.

Sales tax keeps its own day.

Sales tax runs on its own calendar, and it is easier to trust once the months already agree with the bank. The state piece is 6.25 percent. A city or a county or a transit body can add as much as 2 percent more, and the pieces on a single sale stop at 8.25 percent together. A rate that belongs only to one city is looked up for that address on the day of the sale. It is not printed here.

The sales return lands on the twentieth. Monthly filers use the twentieth in the month after the period. Quarterly sales tax is paid four times, in April and July and October and January, each time on the twentieth. Once-a-year filers have a single date, the twentieth of January. When the payment is over 1,000,000 dollars it has to move on TEXNET, and the prior business day is the real deadline, with the cutoff that evening at eight, Central time. No early-filing discount is printed here. If a year offers one, the Comptroller page for that year is where it is read.

Money collected as sales tax is held for the state, so the tenth does not book it as a cost merely because a receipt is in the folder. Tax paid on a purchase the business made stays attached to that purchase. The tenth still has to say whether the purchase belonged to the company at all.

The return waits on months the tenth already closed.

A federal return is easier to trust when every month under it already has a finished page. Partnership figures land on Form 1065. An S corporation lands on Form 1120-S. A C corporation lands on Form 1120. The Texas report does not retire any of those three. A company the IRS treats as disregarded does not file a federal return under its own name. Its year already lives inside the return the owner files, and the closed months are what that owner return has to be able to show.

Form 2553, the S election, can go out during the calendar year before the tax year starts. The other window is the opening stretch of the tax year, two months plus fifteen days. A year that starts on January 1 closes that second window on March 15. Any other start date keeps a window of its own, so the middle of March is not a date we hand to every owner.

Before a distribution that is not wages, reasonable pay for the work is settled. The wage under discussion will not sit above what the owner actually received. The IRS may reclassify an amount that wore another name. The election does not move a personal cost into the company, and it does not move a company cost out of the company. Those lines are still named on the tenth.

A purchase, the pay you take, and the amount set aside can still reshape a year that has not closed. After the close, those same items are only facts to write down. Counting each finished month is the tenth. Reading those counts is how October can still describe what the year may become. An estimate built from closed months is not last year's bill chopped into four guesses.

Payday papers beside the close.

New hires and rehires go to the Child Support Division at the Texas Attorney General. The clock runs 20 calendar days from the day wages begin, and the duty shows up when a Form W-4 is required. The quarterly wage filing is a separate paper. It does not replace that notice. The notice uses the employer identification number the company already has.

Withheld income tax, Social Security, and Medicare for a quarter are reported on Form 941. Federal unemployment for the year is reported on Form 940, and that unemployment tax stays with the employer rather than coming out of pay. A quarter whose unemployment tax passes 500 dollars is deposited by the end of the next month. Publication 583 is why those employment-tax records stay four years, counted from the later of the due day and the day the tax was paid. The percent attached to trust-fund tax is left off this page on purpose.

The monthly page reads the pay registers after the fact. It does not run payday, and it does not replace the provider that already pays your people. Setup can sit beside the close. The run itself stays on your calendar and on that provider. Say it on the form when no pay service is in place yet, because setup is its own start.

A Comptroller letter points back at a finished month.

A letter from the Comptroller is easier to answer when the file can show which finished month a number came from. We pull the closed months first. The letter is not a deduction, and state letterhead does not turn it into one. Answering the letter is a separate conversation from the page that closed the month. If the letter points at one line, that line should already have a home on a page you have seen.

Anyone who quotes a refund, a balance due, or a savings figure before the months have been seen is selling a different product. No figure of that kind is printed here. If a letter is already in the stack, bring the oldest open month with it. The tenth cannot be promised on top of a month that is still loose.

Assurance a lender would rely on is a different engagement, and that boundary lives on the disclosures page in one section you can open on its own. Building the franchise report from finished months is not that assurance. A lawsuit about the tax is not this page. The work here remains the month on a day you can name, including for an owner who lives far from Dallas.

The pages we read these figures from.

The practice is in Dallas. The figures in the sections above were read from the Comptroller franchise pages, from Publication 98-806, from the sales-tax page, from the Attorney General page on new hires, and from the IRS pages for Form 2553 and the employment returns. A finished month is still what places a number. Confirm a holiday shift on the extensions page in the year you file.

Franchise tax home. Filing requirements. Information reports. Extensions. Sales tax. Interest. New hire reporting. Form 2553 instructions.