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Texas LLC and INC Annual Filing Requirements

Once you have incorporated a business or formed an LLC, you will need to prepare yourself for all ongoing and annual compliance requirements in the state of formation. If your business is based in Texas then your business has to meet Texas LLC annual requirements or Corporation annual requirements depending on the chosen business type. A business is required to maintain external as well as internal business compliance. This article has been created to provide you with information and guidance on annual filing requirements of an LLC and corporation including Franchise Tax Public Information Reports, Texas corporation annual report, and penalties on failure to file these reports.

Texas LLC Annual Filing Requirements

You can form a limited liability company in Texas as such a form of business has several advantages like flexibility of tax treatments, privacy protection, and limited liability for members among others. Once you have registered your startup, the active status of the company will depend on how compliant you are with the Texas LLC annual requirements. Different states in the US have different sets of annual requirements although filing of an annual report also known as Texas LLC public information report is quite common amongst most states. Let’s take a look at what this report is and how to file it.

Franchise Tax Public Information Report

One of the important annual requirements for LLC and corporations in most states including Texas is the annual report. In Texas, it is known as the Public Information Report (PIR) and the Ownership Information Report (OIR). The PIR is also known as the Texas Franchise Tax Public Information Report and is separate from all other types of Texas franchise tax return forms or reports and is one of the foremost Texas LLC annual requirements.

What does it include and how to file?

The Texas LLC Public Information Report provides basic information regarding the entity including the name and mailing address of the entity and each member. If your LLC business doesn’t owe any franchise tax, even then you will be required to file a PIR as it is one of the mandatory Texas LLC annual requirements. This report is filed with the office of the Texas Comptroller of Public Accounts (CPA). You can mail it or submit it online using the Webfile esystems. In order to file online, you would be required to create an account or profile first.

When submitting the Texas LLC Public Information Report you need to ensure all the required information has been provided. Some of the things you need to check include:

  • Selecting the correct report year is important. Since a PIR report is classified under Texas LLC annual requirements, you need to create the report for the current year.
  • You need to provide the “Industry Classification Code” for your limited liability company. This comprises the Standard Industrial Classification (SIC) code and the North American Industry Classification System (NAICS) code. These codes will help the office of the Texas Comptroller to identify the primary industry your LLC is transacting business in.
  • You will be required to provide information regarding LLC members, owners, and managers if applicable.
  • You will need to provide information on principal place of business and principal office of the said LLC
  • If a limited liability company owns any other Texas business then the Texas LLC Public Information Report will contain SOS file number of such entities
  • You will also need to provide contact information of Texas LLC registered agent

It is important to note that as a part of the Texas LLC annual requirements, the Public Information Report (PIR) has to be submitted along with the Texas franchise tax report.

What is the due date for filing?

The filing of the Texas LLC Public Information Report is governed by Texas Tax Code – TAX § 171.203. As a part of Texas LLC annual requirements, the PIR or annual report has to be filed annually by May 15 in the year following the year your LLC was registered. For example: If you registered or formed your LLC on Aug 25, 2021 then the Public Information Report will be due on May 15, 2022.

Penalties if fail to file

It is important to file the Public Information Report along with the Texas franchise tax report. If you fail to file this report then the office of the Texas Comptroller of Public Accounts (CPA) may send a 45 days “notice of forfeiture”. If you fail to file the report along with penalties within the stipulated period then the comptroller can forfeit certain LLC privileges pursuant to Texas Tax Code – TAX § 171.251.

Texas INC Annual Filing Requirements

A business corporation is quite a popular form of business for entrepreneurs due to the many advantages it has like business security, personal liability protection, access to capital through investors and VCs, and continuity. Once you have incorporated your startup, it is important to identify your Texas Corporation annual requirements as failure to maintain them can lead to penalties for the company. One of the most important annual requirements is the Texas corporation annual report also known as the Public Information Report (PIR). Let’s take a look at the requirements of the Public Information Report and how to file it.

Texas Franchise Tax Public Information Report

When you form a corporation in Texas, there are several annual compliances that your company has to meet in order to enjoy active status. One of the foremost annual compliances is that of filing a Texas corporation annual report also known as the Franchise Tax Public Information Report (PIR) pursuant to Texas Tax Code Chapter 171 – § 171.203. Although a corporation or professional corporation in Texas needs to file the Public Information Report (PIR), other forms of businesses may be required to file the Ownership Information Report (OIR) and this depends on the type of business that is filing a franchise tax report.

What does it include and how to file?

The Texas corporation annual report or the Public Information Report (PIR) consists of basic information regarding a corporation. Some of the information that is provided through the report includes the name and mailing address of the entity as well as the owner, director, and managers. If a corporation reports total annual revenue generated to be less than $1,180,000 then they will be considered to be in the “No Tax Due Threshold” or No Franchise Tax Due bracket. In such a scenario, you will still be required to file the PIR as a part of your Texas Corporation annual requirements.

This Texas corporation annual report is filed with the office of the Texas Comptroller of Public Accounts (CPA). You can mail it or submit it online using the Webfile esystems. You would be required to create a profile in order to submit the report online.

As a part of the Texas Corporation annual requirements, your Public Information Report should contain the following information:

  • It is important to select the correct Texas corporation annual report year. Unlike, a franchise tax report, which is based on the financial year; the annual report has to be submitted each year.
  • You will have to provide personal information including mailing address of directors, managers, or owners of the corporation if applicable.
  • You will be required to provide “Industry Classification Code” for your corporation in order to meet the Texas corporation annual report requirements. The codes will help the office of the Texas Comptroller to identify the primary industry your business is operating in.
  • You will have to provide information regarding the principal place of business and principal office of the said corporation
  • You will also need to provide contact information of Texas LLC registered agent

One of the important aspects of the Texas Corporation annual requirements is that the Public Information Report (PIR) has to be submitted along with the Texas franchise tax report.

What is the due date for filing?

The filing of the Texas corporation annual report for a business corporation is governed by Texas Tax Code – TAX § 171.203. The Public Information Report has to be filed annually by May 15 in the year following the year your business was incorporated. For example: If you incorporated your startup on June 10, 2021 then as a part of the Texas Corporation annual requirements, the Public Information Report will be due on May 15, 2022.

Penalties if fail to file

The Texas corporation annual report is not the only document to be filed by a business corporation as it has to be submitted along with the franchise tax report. According to the Texas Tax Code – TAX § 171.251, failure to file the public information report along with the franchise tax report can lead to penalties and the comptroller may even decide to forfeit certain privileges of the corporation including the privilege to operate in the state.

Texas Franchise Tax

The Texas franchise tax is a type of privilege tax that is imposed on specific business entities that are formed and operate in Texas. It is simply a tax for doing business in Texas. This type of tax is applicable to corporations, limited liability companies, and partnerships and hence such entities will be required to submit a Texas franchise tax report. This privilege tax is an integral component of the Texas LLC annual requirements or corporation annual compliances and is governed by the 2005 Texas Tax Code, Chapter 171- Franchise Tax.

What is Texas Franchise tax?

Texas is one of the few states that don’t have any corporate income tax but it does have franchise tax. It is a type of tax that a state levies against any business simply operating in the said state and hence it is a state tax and not a federal tax. The tax is levied as a part of Texas Corporation annual requirements or annual compliances for most types of businesses. However, certain corporations in Texas like those engaged primarily in selling, manufacturing, or installation of solar energy devices or equipment are exempt from filing a Texas franchise tax report.

The franchise tax rates are different for different states and in Texas, it is calculated based on the taxable entity’s “margin”, which comprises of the following components:

  • Total revenue
  • Cost of goods sold
  • Compensation and benefits

The franchise tax Texas LLC annual requirements or those of other entities are also based on the annual earnings. If the revenues generated are lower than $1,180,000 then such businesses don’t owe any tax and this figure is also known as the “No Tax Due Threshold”. The franchise tax rate for retail or wholesale is 0.375% while that of other businesses is 0.75%. It is important to note that even if a business doesn’t owe any franchise taxes, even then a Texas franchise tax report also known as the “No Tax Due Reports”, has to be filed as a part of the annual requirements.

Texas Franchise Tax Report due dates

Since there are no “minimum tax requirements” under the provisions of the franchise tax rules; you will be required to file a Texas franchise tax report on the revenue earned under the rates or slabs mentioned by the Texas Comptroller of Public Accounts (CPA).

As a part of the Texas Corporation annual requirements or LLC requirements, the franchise tax report has to be filed by May 15 each year and if such a date falls on the weekend or is a holiday then the due date will be shifted to the next business day. One of the important things to remember is that failure to file the Texas franchise tax report can lead to a $50 penalty on each report that is being filed past the due date. There is a 5%-10% penalty if the filing of the reports is delayed 30 days or more.

How to file?

You can submit the Texas franchise tax report at the office of the Texas Comptroller at:

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

You can also file it online using Webfile.

Need any Assistance in Filing Texas LLC or INC Annual Reports?

There are different types of Texas LLC annual requirements or corporation annual compliances but the most important filing is that of the Public Information Report and the Texas franchise tax report. If you are planning to incorporate or form a new business in the state then IncParadise can help you with your Texas LLC or INC annual filing requirements.

We have a team of experienced professionals to assist you with different annual filing requirements. IncParadise also offers additional services for Texas businesses including obtaining an EIN essential for tax filings.

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