Texas Franchise Tax Deadline Alert: What You Need to Know Before May 15th

The May 15th Texas franchise tax extension deadline is approaching fast. If you have Texas franchise tax obligations, here's what you need to know before the deadline — and what could trigger additional filing requirements down the road.

File Your Extension by May 15th

If you haven't already, make sure your Texas franchise tax extension is filed by May 15th. But depending on your payment amount, your obligations may not stop there.

If you make a payment of $10,000 or more and are subject to the electronic payment mandate, a second extension must be filed by August 15th — even if no additional payment is due at that time.

Are You Subject to Electronic Payment Requirements?

Texas state law requires taxpayers who paid $10,000 or more in a payment category during the preceding state fiscal year to submit payments electronically. Accepted methods include:

• TEXNET
• Electronic check via Webfile
• Electronic check via Electronic Data Interchange (EDI)
• Credit card

The Comptroller's office will notify taxpayers who meet this threshold at least 60 days before the due date.

A Few Important Things to Keep in Mind

• Once the $10,000 threshold is met in any tax category, electronic payment is required for all future payments in that category — it doesn't reset year to year.
• This applies across tax types. If your company hits $10,000 in both sales and use tax and franchise tax, both must be paid electronically.
• Taxpayers who paid $500,000 or more in a single tax category in the prior fiscal year must pay exclusively through TEXNET. This requirement also carries forward into subsequent years.
• Non-compliance carries a 5% penalty per filing period where payment is not made electronically.

Bottom Line

Texas franchise tax compliance has layers, and missing a requirement can be costly. Make sure you know your thresholds, your deadlines, and your payment method obligations before May 15th.

Have questions? Leave a comment below, or feel free to contact your CRR representative directly. We are happy to help.