Texas Franchise Tax Returns Due 5/15: Will You Get A Notice This Year?
Texas Franchise Tax returns are due May 15th, just a few days from now. Over the past couple of years, taxpayers have attempted to comply with Texas' new franchise tax laws (the "Margin Tax"), but have unfortunately received numerous notices regarding filing the right forms, filing the correct information reports, and attaching the correct affiliate schedules to extensions and combined returns.
Before filing your return or extension for May 15th, make sure you verify if your entity meets the thresholds to file an "EZ report" or "No Tax Due Report."
If you are filing a combined report, verify which entities actually have nexus with Texas (remember, this can change from year to year).
Also, make sure that you file the correct public information report for each entity that has nexus, and attach the correct affiliate schedule to the extension (there is one form for extension purposes and another for return purposes).
If your company has any entities that qualify as a "passive entity," remember, passive entities are not included in a combined report and are nontaxable for Texas franchise tax purposes.
Here is a link to a recent Texas powerpoint presentation to provide some helpful info.
If you need any assistance in filing your extension or return this year, help in determining if your company has nexus in Texas, or help in determining if an entity qualifies as a "passive entity," please contact me at firstname.lastname@example.org.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at email@example.com.
Because state and local taxes are deceptively simple and endlessly complicated.