Texas Franchise Tax Filing in Dallas, Expert CPA Preparation & Compliance
Every Texas business entity owes the state a franchise tax report each year, and missing the deadline or miscalculating your tax-due amount can trigger penalties, interest charges, and even involuntary forfeiture of your right to do business in Texas. At AG Freideman, we handle Texas franchise tax filing for Dallas-Fort Worth businesses of every size, from single-member LLCs with zero tax due to multi-entity S-Corps and partnerships generating millions in revenue. Al Freideman, a licensed CPA with over 30 years of tax and accounting experience, personally reviews every franchise tax return before it’s filed, so you get the accuracy and strategic attention that chain preparers and DIY software simply can’t match.
What Our Texas Franchise Tax Service Includes
Who Needs Texas Franchise Tax Filing?
If you operate a business entity registered with the Texas Secretary of State, you almost certainly have a franchise tax obligation, even if your business earned no revenue, even if you owe zero tax, and even if this is your entity’s first year of existence. This applies to LLCs (single-member and multi-member), S-Corporations, C-Corporations, partnerships, professional associations, and limited partnerships formed or doing business in Texas. We work with Dallas-Fort Worth business owners across every one of these entity types.
Our typical franchise tax clients include small business owners in Dallas, Plano, Richardson, Allen, McKinney, and Frisco who formed an LLC or S-Corp and don’t realize they have an annual state filing requirement until they receive a notice from the Comptroller. We also serve established businesses with complex multi-entity structures, construction companies and contractors operating across Texas, restaurant owners managing multiple locations in the DFW area, medical and dental practices, law firms, real estate investors holding properties in LLCs, and entrepreneurs who recently formed a Texas LLC and need help navigating their first franchise tax filing. If you own a business entity in Texas, we can help, whether your total revenue is $50,000 or $5 million.
How Does the Texas Franchise Tax Work?
The Texas franchise tax, sometimes called the Texas margin tax, is an annual tax imposed on most business entities operating in the state. Unlike a traditional income tax (Texas has no state personal income tax), the franchise tax is calculated based on a business’s total revenue, or “margin,” rather than net profit. Understanding how it works helps you see why professional preparation matters.
For the 2026 report year, the general franchise tax rate is 0.75% of taxable margin for most entities, with a reduced rate of 0.375% for qualifying retailers and wholesalers. Taxable margin is calculated as total revenue minus the highest of three deductions: cost of goods sold, total compensation paid, or 30% of total revenue. Alternatively, businesses can elect the EZ Computation method, which taxes 100% of apportioned total revenue at a rate of 0.331%. The EZ Computation is simpler but not always the cheapest, that’s where having a CPA who runs the numbers on each method saves you real money.
Entities with annualized total revenue at or below the no-tax-due threshold still must file a report, they just won’t owe any tax. Failing to file, even when you owe nothing, can result in the Comptroller forfeiting your entity’s right to transact business in Texas. That’s a serious consequence that affects your ability to enforce contracts, access business bank accounts, and maintain your liability protection.
Our Texas Franchise Tax Filing Process
Why Choose AG Freideman for Texas Franchise Tax in Dallas?
There are hundreds of CPAs and tax preparers in the Dallas-Fort Worth area. Here’s why business owners across DFW choose AG Freideman for their franchise tax compliance:
30+ Years of CPA Experience: Al Freideman has prepared Texas franchise tax returns since the margin tax was introduced in its current form. He’s seen every entity structure, every revenue scenario, and every Comptroller notice. That depth of experience means your return is prepared correctly the first time, with every available deduction and exclusion applied. Less experienced preparers frequently miss the optimal calculation method or fail to properly apportion revenue for multi-state businesses, mistakes that cost you money or trigger audits.
Personal Attention From a Licensed CPA: When you hire AG Freideman, Al handles your franchise tax return himself. He’s not passing your file to a seasonal preparer or a junior associate who’s filing franchise tax returns for the first time. You work with the same CPA every year, someone who already knows your entity structure, your revenue patterns, and your business goals. That continuity eliminates errors and saves time. It’s the reason we have 52+ five-star Google reviews and zero negative reviews.
Convenient Dallas Location + Full Virtual Service: Our office is located at 17304 Preston Road, Suite 861, in the heart of North Dallas, easily accessible from Plano, Richardson, Allen, Frisco, McKinney, Prosper, and Celina. If you prefer face-to-face meetings, we’re here. If you prefer to handle everything by phone, video call, and secure document upload, that works just as well. Many of our DFW clients never set foot in the office and receive the same level of personal attention.
Transparent Pricing With No Surprises: We quote your franchise tax filing fee upfront based on your entity type and complexity. Our Texas franchise tax and Public Information Report filing starts at $250 and ranges up to $500 depending on the complexity of your entity structure and revenue calculations. There are no hidden fees, no surprise invoices, and no hourly billing that makes you afraid to ask questions. The price we quote is the price you pay.
Common Texas Franchise Tax Questions
When Is the Texas Franchise Tax Due in 2026?
The Texas franchise tax report and Public Information Report are due on May 15, 2026 for the 2025 report year (based on your accounting period ending in 2025). If May 15 falls on a weekend or holiday, the deadline moves to the next business day. Texas also grants an automatic extension to November 15 if you file a timely extension request and pay at least 90% of the tax that will be due on your final report. If your entity has a federal extension on file, the Texas extension is typically granted automatically, but it’s safest to file a specific franchise tax extension to avoid any issues with the Comptroller.
What Is the No-Tax-Due Threshold for Texas Franchise Tax?
For the 2026 report year, entities with annualized total revenue at or below the Comptroller’s no-tax-due threshold are not required to pay any franchise tax. The Comptroller adjusts this threshold periodically based on the Consumer Price Index. However, even if your revenue falls below this threshold and you owe zero tax, you are still required to file a No-Tax-Due Report and a Public Information Report. Failure to file results in penalties and can lead to forfeiture of your entity’s right to do business in Texas.
What Happens If I Don’t File My Texas Franchise Tax Report?
The consequences are serious. The Texas Comptroller will assess penalties (5% of the tax due if filed within 30 days of the deadline, 10% if filed later) plus interest on unpaid tax. Beyond financial penalties, the Comptroller can forfeit your entity’s right to transact business in Texas. A forfeited entity cannot sue or defend a lawsuit, cannot maintain its liability protection, and may face difficulty with banking, contracts, and licensing. The Texas Secretary of State can also administratively terminate your entity for failure to file. Reinstatement requires filing all delinquent reports, paying all taxes, penalties, and interest, and paying reinstatement fees. It is far cheaper and simpler to file on time, and that’s exactly what we ensure for every client.
Does My Texas LLC Need to File a Franchise Tax Report Even If It Had No Revenue?
Yes. Every LLC, corporation, partnership, and other taxable entity formed in Texas or registered to do business in Texas must file an annual franchise tax report regardless of whether the entity earned revenue, operated at a loss, or was completely dormant during the reporting period. A zero-revenue entity files a No-Tax-Due Report and a Public Information Report. Many new LLC owners in Dallas and throughout DFW are unaware of this requirement and receive their first notice from the Comptroller as a surprise. If you recently formed a Texas LLC, call us at (972) 893-3481 so we can make sure you’re set up for compliance from day one.
How Is the Texas Franchise Tax Calculated?
The franchise tax is calculated on your entity’s “taxable margin,” which is total revenue minus the highest of three possible deductions: cost of goods sold (COGS), total compensation, or 30% of total revenue. The tax rate applied to that margin is 0.75% for most entities, or 0.375% for qualifying retailers and wholesalers. Alternatively, businesses can elect the EZ Computation, which taxes total apportioned revenue at 0.331% with no deductions. The best method depends entirely on your business’s financial profile, a restaurant with high COGS may save thousands using the COGS deduction, while a professional services firm in Plano or Richardson might benefit from the compensation deduction. Al runs the numbers under every method to find the one that legally minimizes your tax.
Can a CPA Help Me Lower My Texas Franchise Tax?
Absolutely, and that’s one of the primary reasons business owners hire us rather than filing on their own. A licensed CPA evaluates every available deduction method, identifies revenue exclusions you may qualify for (such as flow-through funds for certain industries), ensures proper apportionment if you do business in multiple states, and catches errors that could cause you to overpay. We’ve had clients come to us after years of using the EZ Computation method when the long-form calculation with the compensation deduction would have saved them thousands of dollars annually. The preparation fee pays for itself many times over when the right method is applied.
What’s the Difference Between the Texas Franchise Tax and Federal Income Tax?
They’re completely separate obligations. Texas has no state personal income tax, so the franchise tax is the state’s primary way of taxing business activity. It’s levied on business entities (LLCs, corporations, partnerships), not individuals, and it’s based on revenue and margin, not net income. Your federal tax return (1040, 1120S, 1065, or 1120) is filed with the IRS and calculates tax based on income. Your Texas franchise tax report is filed with the Texas Comptroller and calculates tax based on total revenue minus allowable deductions. Both are required. Both have separate deadlines. And both require accurate preparation by someone who understands the rules. We handle both for our Dallas-Fort Worth clients under one roof, our tax preparation services cover federal returns, and our franchise tax service covers the state side.
Pricing and Getting Started
Our Texas franchise tax and Public Information Report filing is priced between $250 and $500, depending on your entity type, the number of entities, and the complexity of your revenue calculations. Single-entity LLCs filing a No-Tax-Due Report fall at the lower end. Multi-entity structures, businesses requiring multi-state apportionment, or entities that need amendment of prior-year reports fall at the higher end. We quote your fee during your free consultation so you know exactly what to expect before we begin, no hourly billing, no surprise charges. Many clients bundle their franchise tax filing with our monthly bookkeeping and annual tax preparation, which ensures your books are clean, your federal return is filed correctly, and your franchise tax report flows directly from accurate financials.
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