Texas Franchise Tax — Who Files, the No-Tax-Due Threshold, and Which Form
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- **EZ Computation** (Tex. Tax Code sec. 171.1016): available when annualized total revenue is **$20 million or less**. Tax = 0.331% of Texas-apportioned total revenue. No cost-of-goods-sold or compensation deduction is allowed.
- **Long form**: required above $20 million, and available by choice below it when margin deductions give a better result. Taxable margin is the least of: 70% of total revenue; total revenue minus cost of goods sold; total revenue minus compensation (per-person wage cap $480,000 for 2026–2027 reports; $450,000 for 2024–2025); or total revenue minus $1,000,000 — apportioned to Texas, taxed at **0.375%** for retail/wholesale entities, **0.75%** for all others. Tex. Tax Code secs. 171.002, 171.101.
**Practical answer to "what triggers the long form":** revenue over the no-tax-due threshold creates a tax report obligation; the long form specifically is triggered by revenue over $20 million, or elected below that when COGS/compensation deductions beat the EZ rate.
**Sources:** Tex. Tax Code ch. 171 (secs. 171.002, 171.101, 171.1016, 171.203); Texas Comptroller, comptroller.texas.gov/taxes/franchise/ (rate and threshold table by report year).
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