Texas Franchise Tax

How it works

Grow your business in Texas

Texas doesn’t have a corporate income tax. It has a franchise (margin) tax on most entities formed in or doing business in Texas. Two practical things owners should know:

  • Threshold & rates (current): For recent report years, many smaller businesses fall under the state’s No Tax Due threshold, and above that the tax rate is 0.375% for retailers/wholesalers and 0.75% for others. We confirm your status and method each year.

  • Simplified option: Qualifying businesses can elect an E‑Z computation (a simplified calculation) when it makes sense.

  • How multi‑state works: Texas uses a single‑factor “gross receipts” formula. In simple terms, you pay Texas on the share of your revenue tied to Texas.

  • Less paperwork under the threshold: Beginning with 2024 report years, most entities at or below the threshold generally don’t file a “No Tax Due” report; you may still file company information forms. We handle the details for you.