S Corp ReturnFor Texas owners holding a draft.

The practice is in Dallas.

Dallas is where the practice sits, and the unsigned draft is what the video call is for. You do not fly in, and you do not sit in a room under the dome in the picture. A company in the Hill Country, along the Gulf, or up in the Panhandle is outside Dallas and outside Fort Worth. We do not keep a desk in those places. We read the file you already closed, on the screen you already use.

An owner whose company sits in the Hill Country, along the Gulf, or up in the Panhandle is outside Dallas and outside Fort Worth, and on that video call we are all Texans while the unsigned draft still has to clear the name, the wage form, and the closed month before a Texas report is allowed to ask for a signature.

The password on the payroll provider stays with you. A state report does not change that. We set the provider up. You press payday. We do not ask you to hand the login over so a May filing can go out.

Two dates, one unsigned stack.

For a company that keeps a calendar year, the federal draft is due on the fifteenth day of the third month no matter which state the owner is sitting in, and Texas puts a separate franchise report on 15 May beside that draft.

When 15 May falls on a weekend or a holiday, the Comptroller pushes that May day to the following business day, and you confirm the year's shift on the extensions page because a moved date is left off this page on purpose.

Signing the federal draft does not file the May report. Filing the May report does not close the month under the federal draft. Owners feel both dates in the same week and want one signature to cover both stacks. We keep the stacks apart. The federal pages still have to survive the name, the wage form, and the close. The May pages still have to name the right report year.

An extension on the federal return buys a later federal day. It does not push 15 May. An extension on the franchise report buys a later state day. It does not close the books. If either stack is early, we say so before anyone signs.

Who the May report belongs to.

Publication 98-806 treats the franchise tax as a privilege tax, and it puts an S corporation on the same filer list as a corporation, a limited liability company with one owner, a series company, a bank, a partnership, a trust, a professional association, and a joint venture, so a federal draft already in your hand usually means the May stack exists too.

A person who never formed a company stays off that list, and so does a general partnership owned only by natural persons, unless that partnership is a limited liability partnership, and Rule 3.586 is the publication's own place for examples of doing business in Texas rather than a story this page should invent beside your draft.

We still read the federal printout and the May pages as two stacks, because a finished-looking federal draft is not proof that Form 05-102 or Form 05-167 was prepared.

The dollar line, with the year attached

Hold the draft's year next to the Comptroller row before anyone signs, because report years 2026 and 2027 put the no-tax-due line at 2,650,000 dollars of annualized total revenue, and at or under that line the privilege tax itself is zero while Form 05-102 or Form 05-167 is still the short report that gets signed unless the skip list below applies.

Report years 2024 and 2025 used a revenue line of 2,470,000 dollars and a per-person compensation cap of 450,000 dollars, so a 2024 cap must not wander into a 2026 paragraph and a 2026 line must not be pasted onto a 2024 draft.

Picture a spare-parts company we invented, with one owner and 900,000 dollars of revenue in the year the draft covers, clearly not a client file. The privilege tax on that made-up year can be zero and the public information report can still be waiting, which is why we would refuse to sign the federal pages and then leave the May stack in a drawer.

Rates for the year you are filing

On a 2026 or 2027 May report that actually has tax, retail or wholesale uses 0.375 percent and every other business uses 0.75 percent, the compensation subtraction stops at 480,000 dollars per person, and an EZ path stays open at 0.331 percent only when annualized total revenue is 20 million dollars or less, which gives up the margin subtractions a long form would keep.

The long form is the path once the company is over the no-tax-due line and is not on EZ, or once the company wants a margin subtraction, and the 2024 and 2025 row keeps the lower revenue line and the 450,000 dollar cap already named while the rate pair and the EZ ceiling on the Comptroller page match the later years.

How the margin is built.

When the privilege tax is more than zero and the company does not choose EZ, Publication 98-806 lets the May math use seven tenths of total revenue, or total revenue after the cost of goods sold comes off, or total revenue after compensation comes off, or total revenue after 1,000,000 dollars comes off, and that last path has been allowed since the first day of 2014.

The starting revenue is the federal amounts minus the exclusions in Tax Code section 171.1011, which is why an open month under the federal draft will move the Texas starting number and why we will not sign while that month can still change.

In this tax the goods subtraction generally covers what it took to acquire or produce tangible personal property and real property sold in the ordinary course, with the industry exceptions written in section 171.1012, so the spare-parts company we invented might have the subtraction while a company that sells only the owner's time often will not, and we will not invent goods to create it.

After the method is chosen, the margin is apportioned to Texas using gross receipts, a combined group has to share one method, and each member organized in Texas or holding nexus still signs its own short information report.

Wages on the May math.

The compensation subtraction, capped per person at the cap for that report year, takes W-2 wages and cash paid to officers, directors, owners, partners, and employees, including net distributive income paid to natural persons, plus benefits the Comptroller allows such as workers' compensation, health care, and retirement.

1099 labor stays out of that subtraction, and so do the payroll taxes the company pays as the employer, while the bank debit to the provider remains funding on the May math the same way it remains funding on the federal draft, so the gross that can enter the subtraction has to live on the wage form.

A Friday transfer into a personal account stays money taken out even when 15 May is close, and if the wage form is missing both stacks wait rather than letting us invent a wage from the size of the funding debit.

The short report that still gets a signature

Form 05-102, the public information report, is the short page for a corporation, a limited liability company, a limited partnership, a professional association, or a financial institution organized in Texas or with nexus, and an officer, a director, or another authorized person is the one who completes it and signs it, while other taxable entities with a Texas organization or with nexus use Form 05-167, whose ownership information the Comptroller site keeps confidential.

That short page shares the franchise report's due day even in a year under the no-tax-due line, and the only skips we will rely on are an exempt entity, an entity with no Texas organization and no Texas nexus, a passive entity, and a qualifying new veteran-owned business during its first five years.

Leaving the short page unfiled can forfeit the right to do business in Texas under Tax Code sections 171.251, 171.2515, 171.252, and 171.255, including the loss of a right to sue or defend in a Texas court and personal liability of officers, directors, partners, members, or owners for certain debts, while sections 171.259 and 171.260 hold that result off financial institutions.

An officer change after the filing waits for the next annual report unless you file an amended report for an error or a critical need, and a registered-agent change goes to the Secretary of State rather than onto Form 05-102 or Form 05-167.

What a late May report costs.

On the May stack, a report that misses its due day carries a 50 dollar penalty, a tax payment in the first 30 days after that day carries an extra 5 percent, a payment after those 30 days carries an extra 10 percent, and interest begins on day 61, with the percent left on the Comptroller interest page instead of copied here.

Those extras follow the report year and the day the money arrived, so a hurried signature on the federal draft does not shrink them, and the note you send should say whether the May stack is the late one or the federal stack is the early one.

Extra time, and the payment that asks for it

Extra time on the May report starts when a payment or a Comptroller form arrives by the original due day, and the payment is generally aimed at the whole prior-year tax or at 90 percent of the tax the current report will show, except that a company first subject to the tax in the prior year cannot aim at the whole prior-year tax on its first annual report.

Where electronic funds transfer is not required, Webfile or Form 05-164 can carry the report out to 15 November, while a company that paid 10,000 dollars or more in the previous state fiscal year uses electronic funds transfer, with a first extra date of 15 August and a second that runs to 15 November.

Where the prior payment was 500,000 dollars or more, the extension request is a timely TEXNET payment under code 13080 and Form 05-164 stays unsent, and the clock that makes that TEXNET payment timely has to be read on the live extensions page rather than memorized here.

A weekend or a holiday can move 15 May, 15 August, and 15 November, so confirm the year's shift on the extensions page before a Saturday printed on a notice is treated as the last day to sign.

When the company leaves Texas.

Once the company no longer has sufficient nexus, the final report is due inside 60 days, and meeting the payment rules can add 45 days past that original final due day, while ending the Texas tie stays your decision and pulls in both that final report and the Secretary of State certificate of account status.

Read the Comptroller close-or-reinstate instructions before the order of those steps gets locked, because this page will not invent that order, and the last federal draft still has to clear the four stops even when a final state report is also in the stack.

Research-and-development credit rules changed for filings dated on or after the first day of 2026, and the franchise home page is the pointer, so follow that Comptroller link on the day you file rather than a retelling stored on this page.

Sales tax when the company also sells

When the S corporation sells taxable goods or a service the state has listed, sales tax sits in a third stack beside the federal draft and the May report, with a state piece of 6.25 percent, a local add-on from a city, a county, or a transit district of up to 2 percent, and a combined ceiling of 8.25 percent that still depends on the place, which you look up on the rate locator the day of the sale rather than reading a city rate off this page.

The letter that arrives after a permit says whether the sales report is monthly or quarterly, monthly reports follow on the 20th of the next month so the April report in the Comptroller's own example is due 20 May, quarterly reports fall in April, July, October, and January, a once-a-year filer reports the prior year on 20 January, and a Saturday, Sunday, or legal holiday pushes that day to the next working day.

A seller who files and pays on time may keep five tenths of one percent of the sales tax, a seller who prepays may keep that same slice plus another 1.25 percent, a late sales report carries a 50 dollar penalty, the first 30 days late add 5 percent of the tax, later than that adds 10 percent, and interest on the sales tax begins on day 61 with the percent left on the interest page.

A TEXNET sales payment above 1,000,000 dollars has to start by 8 p.m. Central Time on the banking business day before the due day, a TEXNET payment of 1,000,000 dollars or less has until 10 a.m. Central Time on the due day, and the Comptroller's own letter is what tells a business it has crossed into electronic pay.

A shop in Texas and a sale through a marketplace

On a sales report that has to agree with the draft, local sales tax follows the seller's place of business and local use tax follows the place the customer first stores, uses, or consumes the item, and a place of business means a store, an office, or another spot where sales people take three or more orders in the calendar year from people other than employees, contractors, and affiliates.

A server, an internet address, a website, a domain name, or a software application does not become that place of business on its own, a warehouse does not either unless the three-order test is met there, and an order taken face to face is completed at the Texas spot where it was taken.

A remote seller under 500,000 dollars of Texas gross revenue from tangible personal property and services during the prior twelve calendar months, marketplace sales included even when the marketplace collected, can stay without a permit and without collecting use tax, while a made-up remote seller with 220,000 dollars on its own site and 310,000 dollars through marketplaces is over that line because the piles add, so that seller collects on the site sales and the marketplaces collect on theirs when their terms say they will.

A remote seller who sells only through a marketplace and has accepted that written promise in good faith can skip the permit and must still keep those records at least four years, the same four years every seller keeps for gross receipts, but a person who lives in Texas and sells only through a marketplace still needs the permit because the physical presence is already here.

A short stay of inventory in a marketplace provider's Texas warehouse, under the safe harbor and with the provider's terms promising collection, does not by itself force a permit, while crossing the safe harbor means a permit and collection, and a taxable entity storing inventory that way still has the May franchise report in the same conversation as the federal draft.

Marketplace providers do not get the single local use-tax rate, and a provider that is itself a remote seller measures the same 500,000 dollar test on sales through the marketplace, while on the return the marketplace sales sit in total Texas sales and come back out of taxable sales when the terms promise collection.

A made-up sales return with 40,000 dollars through a marketplace and 15,000 dollars of the company's own taxable sales shows 55,000 dollars on the total line and 15,000 dollars on the taxable line, the written promise can live in the terms of use, and both the provider and the seller can be audited.

Form 01-799's single local use-tax rate belongs only to a remote seller, the FAQ has stated 1.75 percent, and the FAQ on the filing day wins, so a company with a Texas shop leaves that rate alone, and a seller who spends twelve straight months under the line and wants to stop collecting uses the Comptroller's ending form, then reads the live FAQ for the day collection would start again.

The resale paper, and a use that is not a sale

Form 01-339 is the resale paper and the exemption paper an owner should keep with the draft, because a taxable item bought to be sold again can skip the tax only when the seller accepts a completed 01-339, and that paper, kept four years, is the evidence a permit number cannot replace.

A later use of the item brings the tax back, so a box of bolts taken off the shelf to fix the company's own truck is a use reported on the taxable-purchases line at the fair-market rental value for the time of the use or at the purchase price, and a buyer who is unsure about resale should not issue the paper while a mixed purchase has to mark which items are for resale.

A blanket 01-339 is allowed only when every purchase will be resold in the regular course and the paper says so, the seller still checks that the paper is complete and questions one offered for something that business does not normally resell, such as a parts counter handing over a paper for a living-room sofa, and the seller can confirm the permit is active in the Comptroller search.

The paper may cover resale in the United States or in Mexico, and the FAQ stops there, while industry notes about which labor and which goods are taxable stay in the trade publication and the rate locator on the day of the sale rather than becoming a second rate on this page.

What this page will not hold.

We will not hold your payroll password. We will not print a city sales-tax rate. We will not print the interest percent. A 2024 revenue line stays in a 2024 paragraph, and a 2026 line stays with the 2026 draft. We will not sign a federal draft because 15 May feels loud, and we will not skip Form 05-102 because the tax itself is zero.

A number on this page is a Comptroller number for the report year named beside it, or a federal date that does not change when you cross a state line. A dollar story about spare parts is a story we invented so the shape is visible. Your file is the draft in your hand.

Bring the federal draft, the wage form, and the May page you are unsure about, and if one of them is missing, say which one in the form below or on the calendar, or call the phone number under the page when a booking grid is a poor fit for a notice that is already close.

Name the Texas page in the stack