Texas Franchise Tax TAX NOTICES AND RESOLVING PROBLEMS WITH YOUR ACCOUNT

Issue:

• No franchise tax report filed; or
• Franchise tax report was not accepted. (You will be notified by letter regarding the reason for non-acceptance of your report.)

To resolve:

• File the franchise tax report - see Filing Methods; or
• If your entity is a member of a combined group, see Combined Reporting Information.

Issue:

• No original franchise tax report and/or Public Information Report filed; or
• Franchise tax report was not accepted. (You will be notified by letter regarding the reason for non-acceptance of your report.)

To resolve:

• File the franchise tax report and/or the Public Information Report - see Filing Methods; or
• If your entity is a member of a combined group, see Combined Reporting Information.

Issue:

• No franchise tax report and/or Ownership Information Report filed; or
• Franchise tax report was not accepted. (You will be notified by letter regarding the reason for non-acceptance of your report.)

To resolve:

• File the franchise tax report and/or Ownership Information Report - see Filing Methods; or
• If your entity is a member of a combined group, see Combined Reporting Information.

Issue:

• The entity filed the franchise tax report but did not pay the entire amount due. The amount due may include tax, penalty, interest or any combination of the three. The breakdown of the amount of tax, penalty and/or interest due is listed on the delinquent notice.

To resolve:

• Pay the amount due.

Electronic payment options include:

• Web Electronic Funds Transfer (WebEFT) via Webfile
• Credit card (American Express, Discover, Mastercard® or Visa) via Webfile
• Approved Electronic Submission Software Providers
• TEXNET

Issue:

• An information report was not filed;
• The incorrect information report was filed for your entity type; or
• The information report was filed without a signature.
• Entities legally formed as corporations, limited liability companies (LLCs), limited partnerships, professional associations and financial institutions must file Form 05-102, Texas Franchise Tax Public Information Report, as part of their franchise tax filing. All other entity types must file Form 05-167, Texas Franchise Tax Ownership Information Report, as part of their franchise tax filing.

To resolve:

• File the correct information report signed by an officer, director, partner, member or other person authorized by the entity. Electronic filing of this report satisfies the signature requirements - see Filing Methods.

Issue:

• A combined group franchise tax report was filed but we did not receive your common owner information. The reporting entity of a combined group with a temporary credit for business loss carryforward preserved for itself or one of its affiliates must file the common owner information by the franchise tax report due date. The common owner is the individual or entity that owns more than 50 percent (directly or indirectly) of each member of the combined group. Note that the common owner is not necessarily the same as the reporting entity.

To resolve:

• File your common owner information online or use Form 05-177, Common Owner Information Report - see Filing Methods.

Issue:

• Entities filing the long form report must file both pages 1 and 2 of this report.

To resolve:

• File the missing page - see Filing Methods.

Issue:

• Entities taking a credit on Line 32 of Form 05-158B, Texas Franchise Tax Report (long form report, page 2), must also file Form 05-160, Texas Franchise Tax Credits Summary Schedule, to support the credit being taken.

To resolve:

• File the missing Form 05-160, Texas Franchise Tax Credits Summary Schedule - see Filing Methods.

Issue:

• Page 1 of Form 05-158A, Texas Franchise Tax Report (long form report), or Form 05-169, Texas Franchise Tax EZ Computation Report, was filed with the circle blackened that indicates this report is a combined report. Form 05-166, Texas Franchise Tax Affiliate Schedule, must be filed as part of a combined report filing.

To resolve:

• File the missing Form 05-166, Texas Franchise Tax Affiliate Schedule. See instructions and Filing Methods; or
• If the report is not a combined report and the circle was blackened in error, notify our office in writing (Texas Comptroller of Public Accounts, P.O. Box 149348, Austin, TX 78714-9348).

Issue:

• A complete Form 05-166, Texas Franchise Tax Affiliate Schedule, must be filed as part of a combined report filing. The reporting entity must be listed as an affiliate on the Affiliate Schedule.

To resolve:

• File a new Form 05-166, Texas Franchise Tax Affiliate Schedule - see Filing Methods; or
• If you filed an extension, you will want to compare Form 05-165, Texas Franchise Tax Extension Affiliate List, that you filed with your extension request with the Affiliate Schedule that you filed with your report. The most common errors are:
  • Failure to list the reporting entity as an affiliate on the affiliate schedule;
  • Failure to include in the report all the entities that were shown as affiliates on Form 05-165, Texas Franchise Tax Extension Affiliate List, when an extension request was filed; and/or
  • invalid accounting period begin and end dates because the affiliate's dates are not the same as, or within the accounting period of the combined group as shown on page 1 of the franchise tax report.

Issue:

• Page 1 of Form 05-158A, Texas Franchise Tax Report (long form report), or Form 05-169, Texas Franchise Tax EZ Computation Report, was filed with the circle blackened that indicates total revenue was adjusted for the tiered partnership election. Form 05-175, Texas Franchise Tax Tiered Partnership Report, must be completed by all entities (upper and lower) involved in a tiered partnership election under Texas Tax Code Section 171.1015.

To resolve:

• File the missing Form 05-175, Texas Franchise Tax Tiered Partnership Report. See instructions and Filing Methods; or
• If a tiered partnership election was not made and the circle was blackened in error, notify our office in writing (Texas Comptroller of Public Accounts, P.O. Box 149348, Austin, TX 78714-9348).

Issue:

• The tiered partnership report was filed without a tax report and could not be processed to the account.

To resolve:

• File the applicable report: long form or, if qualified, EZ Computation, along with the tiered partnership report - see Filing Methods.

Issue:

• The tiered partnership report that was filed cannot be processed because the entity did not include the lower tier total revenue before passing revenue to the upper tier entity or because the entity reported passing revenue in an amount greater than the lower tier entity's revenue.

To resolve:

• File a corrected Form 05-175, Texas Franchise Tax Tiered Partnership Report - see Filing Methods.

Issue:

• An entity taking a research and development activities credit on Form 05-160, Texas Franchise Tax Credits Summary Schedule, must also complete Form 05-178, Texas Franchise Tax Research and Development Activities Credits Schedule, to support the credit being taken.

To resolve:

• File the missing Research and Development Activities Credits Schedule. See forms and instructions under the applicable report year, and see Filing Methods.

Issue:

• An entity taking a historic structure credit on Form 05-160, Texas Franchise Tax Credits Summary Schedule, must also complete Form 05-180, Texas Franchise Tax Historic Structure Credit Supplement for Credit Claimed on Report (PDF), to support the credit being taken.

To resolve:

• File the missing Historic Structure Credit Supplement for Credit Claimed on Report. See forms and instructions under the applicable report year, and see Filing Methods.

If your entity filed a franchise tax report and still received a delinquent notice, all the reports or schedules necessary to satisfy franchise tax requirements may not have been filed. If you filed the report or schedule we show as missing, call us at 800-252-7942 so we can resolve the issue.

If you think your entity qualifies for exemption from the franchise tax, detailed information about categories of exemption, and the forms to apply for exemption, are available online.

If the entity no longer exists or is no longer subject to the tax and is registered with the Texas Secretary of State (SOS), one of the following applies:

• If the entity is a Texas entity formed with the SOS, you must legally terminate with the SOS; or
• If the entity is a non-Texas entity that has an active registration with the SOS, you may withdraw the Texas registration; or
• If the entity no longer exists in its home state, you must legally terminate the registration with the SOS.

Detailed information about terminating and withdrawing is available online.

Entities not registered with the Texas Secretary of State should notify the Comptroller's office in writing. Provide the reason and the date the entity is no longer subject to the tax to the address below:

Texas Comptroller of Public Accounts
P.O. Box 149348
Austin, TX 78714-9348