Texas Franchise Tax Form 05-163, the No Tax Due Report, was discontinued starting with the 2024 report year and is no longer available for any report year from 2024 forward. If you used to file it, what you do now depends on why you qualified in the first place. Most former filers — those who qualified because their revenue fell below the no-tax-due threshold — file nothing at all for franchise tax purposes, though an annual information report is usually still required. Passive entities and qualifying REITs file a stripped-down version of the Long Form or EZ Computation Report instead.
The change came from Senate Bill 3, passed during the 88th Legislature’s second called session. The bill raised the no-tax-due threshold to $2,470,000 for the 2024 and 2025 report years and amended Tax Code Section 171.204(b) so the Comptroller can no longer require an information report from an entity that owes no tax solely because it falls below that threshold. For the 2026 and 2027 report years, the threshold rises to $2,650,000 under the consumer-price-index adjustment in Tax Code Section 171.006.
What You File Now Instead
Your obligation depends on the reason you previously qualified for the No Tax Due Report.
If Your Revenue Is Below the Threshold
If your annualized total revenue is at or below $2,650,000 for the 2026 report year, you do not file a franchise tax report at all. No 05-163, no EZ Computation, no Long Form. You may still owe a Public Information Report or Ownership Information Report — see the next section — but the tax report itself is gone.
Combined reporting groups apply the same test to the group’s total annualized revenue rather than each member’s. If the combined group is at or below $2,650,000, the group files no No Tax Due Report, no Affiliate Schedule, and no Common Owner Information Report for that year. Every member organized in Texas or with nexus here must still file its own information report.
If You Are a Passive Entity
Passive entities that are registered, or required to be registered, with the Secretary of State or the Comptroller now file either a Long Form Report or an EZ Computation Report each year. The filing itself is minimal: blacken the circle in the taxpayer information section identifying the entity as passive, fill in the accounting year dates, sign, and submit. No other section needs to be completed. Passive entities are not required to file a Public Information Report or Ownership Information Report.
To qualify as passive, the entity must be a general or limited partnership or a non-business trust, and at least 90 percent of its federal gross income during the margin period must come from sources such as dividends, interest, capital gains on real property or securities, distributive shares of partnership income, and mineral royalties. No more than 10 percent can come from an active trade or business. Rental income does not count toward the 90 percent.
If You Are a Qualifying REIT
A qualifying real estate investment trust also files either the EZ Computation Report or the Long Form. Blacken the appropriate circle in the taxpayer section, complete the accounting year dates, sign, and leave the rest blank. Unlike passive entities, REITs must file a Public Information Report or Ownership Information Report.
If You Had Zero Texas Gross Receipts or Were a New Veteran-Owned Business
These were separate qualifying categories under the old Form 05-163. The file does not describe a specific replacement filing for them under the current framework, so confirm your obligation directly with the Comptroller before assuming you have nothing to file.
The Information Report Most Entities Still Owe
Losing the franchise tax report does not release you from the annual information report, and this is where former 05-163 filers most often get into trouble. Entities below the no-tax-due threshold are not exempt from the information report requirement.
Which form you file depends on your entity type. Corporations, LLCs, limited partnerships, professional associations, and similar entities registered with the Secretary of State generally file the Public Information Report (Form 05-102). Certain other entities file the Ownership Information Report (Form 05-167) instead. Information on the Ownership Information Report is confidential under Tax Code Section 171.206 and not open to public inspection.
You can submit through Webfile or mail the report to:
Texas Comptroller of Public Accounts
P.O. Box 149348
Austin, TX 78714-9348
When It Is Due
The annual franchise tax report and the information reports are due May 15. If May 15 falls on a weekend or legal holiday, the deadline moves to the next business day. A $50 late-filing penalty applies to each report filed after its due date, even when no tax is owed. Extensions are available through Webfile or Form 05-164 filed on or before the original due date, with payment conditions attached.
What Happens If You Skip the Filing
The Comptroller is required by law to forfeit an entity’s right to transact business in Texas when it falls behind on franchise tax filings. Before forfeiture, the Comptroller mails a notice giving at least 45 days to cure. If the deficiency is not resolved in that window, two consequences hit immediately: the entity loses the right to sue or defend itself in any Texas court, and each director or officer becomes personally liable for the entity’s debts. Members of a forfeited LLC and directors of a forfeited corporation can be held personally responsible for obligations the entity incurs while forfeited.
Late or Amended Filings for Report Years Before 2024
The earlier thresholds still govern pre-2024 report years: $1,230,000 for 2022 and 2023, and $1,180,000 for 2020 and 2021. That said, the Comptroller’s instructions for the 2024 report year state that Form 05-163 “is not available for any new reporting periods,” which suggests even retroactive filings may need to go through a different process. If you are trying to clean up a late or amended pre-2024 filing where you would originally have used Form 05-163, contact the Comptroller directly at (800) 252-1381 or tax.help@cpa.texas.gov to confirm the correct route before submitting anything.