Texas Changes Franchise Tax Filing Requirements

Date January 19, 2024

As the result of recent legislation (Senate Bill 3), the Texas Comptroller’s Office has announced changes to the franchise tax filing requirements. Effective for franchise tax reports originally due on or after January 1, 2024, the no-tax due revenue threshold is increased to $2.47 million from $1.23 million. The no-tax-due report will be discontinued starting with the 2024 report year. Taxable entities below the revenue threshold are no longer required to file a no-tax-due report.

Taxable entities below the revenue threshold are required to file a Public Information Report (PIR) or Ownership Information Report (OIR). Passive entities, real estate investment trusts (REITs), and taxable entities with zero Texas receipts must submit either a long form or an EZ Computation form. New veteran-owned businesses are exempt from filing a Public Information Report or Ownership Information Report throughout the five-year exemption period.

Combined groups are still required to include all taxable entities even when a member is below the no-tax-due threshold. If the combined group is below the threshold, there is no longer a requirement to file a franchise tax report. If the members of the combined group are organized in Texas or have a nexus with the state, a PIR or OIR must be filed.

The full announcement from the Comptroller can be viewed here

If you have questions on the Texas update or other SALT matters, please contact HBK’s SALT Advisory Group at hbksalt@hbkcpa.com.

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