Blog · Texas
Texas raised the franchise no-tax-due line to $2.65M — and half the internet hasn't noticed.
Two facts for the 2026 report year, both from the Texas Comptroller: the no-tax-due threshold is $2,650,000 of annualized total revenue, and the old No-Tax-Due Report is discontinued — below-threshold entities stopped filing it for reports due on or after January 1, 2024, though the Public Information Report or Ownership Information Report still gets filed. A surprising amount of advice online still quotes the prior $2.47M line. Here's the part that belongs to your books either way: the number that decides everything is a ledger number.
Published · Updated · By Everholt & Co.
Eighteen years, one chart
The no-tax-due line has moved nine times. Here's the whole path.
Figure data as a table
| Label | Value | Note |
|---|---|---|
| '08–09 | $300,000 | — |
| '10–11 | $1,000,000 | — |
| '12–13 | $1,030,000 | — |
| '14–15 | $1,080,000 | — |
| '16–17 | $1,110,000 | — |
| '18–19 | $1,130,000 | — |
| '20–21 | $1,180,000 | — |
| '22–23 | $1,230,000 | — |
| '24–25 | $2,470,000 | the doubling |
| 2026 | $2,650,000 | current |
The chart also explains the confusion this post keeps correcting: for more than a decade the line crept in $20K–$50K steps, so stale content was only slightly wrong — then 2024 doubled it and 2026 nudged it again, and suddenly a page written in 2023 is off by $1.4 million. Date-check every threshold you read, including this one. Source: the Texas Comptroller's franchise tax page, checked September 2026.
What changed
The franchise picture for 2026 reports — and what each side of the line means.
| Requirement | Through 2023 reports | 2024 reports onward (incl. 2026) |
|---|---|---|
| Below-threshold filing | No-Tax-Due Report filed annually | No-Tax-Due Report discontinued — no franchise report owed below the line, except for the entities listed under this table |
| Still filed | Public/Ownership Information Report | Same — the PIR/OIR obligation continues, with the exceptions listed under this table |
| The threshold | $1.23M (2022–23 reports) | $2.47M for 2024–25 → $2.65M for 2026 reports |
| If annualized revenue ≤ the line | No franchise tax due; information report still filed — confirm your entity's package with your CPA | |
| If above the line | A franchise report is due and the computation (margin methods, EZ, rates) is entirely CPA territory | |
| The deciding number | Annualized total revenue — a ledger number, both then and now | |
The exceptions, per the Comptroller: entities not organized in Texas or without Texas nexus, entities exempt from Texas franchise tax, qualifying new veteran-owned businesses during their initial five-year period, and entities that qualify as passive are not required to file a Public Information Report or an Ownership Information Report (PIR/OIR requirements); and qualifying passive entities, qualifying real estate investment trusts and taxable entities with zero Texas gross receipts must still file the EZ Computation Report or the Long Form; a passive entity need not file a Public Information Report or Ownership Information Report, while a REIT and a zero-receipts entity must (no-tax-due changes). Checked: .
Thresholds and filing rules above are the Comptroller's, stated as of July 2026 — they index and change on the state's schedule, and the Comptroller's franchise-tax pages are the authority when they do.
The math, worked
"Annualized" is four steps of arithmetic — on one condition.
Illustrative example — not client data. Assumptions stated.
Figure data as a table
| Step | What happens | Figure |
|---|---|---|
| 1 · P&L revenue | 7-month first year, June 1 – Dec 31 | $940,000 |
| 2 · ÷ days in period | The Comptroller's own mechanics | ÷ 214 days |
| 3 · × 365 | Scaled to a full-year figure | ≈ $1,603,000 |
| 4 · vs the 2026 line | Compared against $2,650,000 | UNDER — CLEARLY |
Assumptions: one Texas entity, not part of a combined group, formed at the start of June with its first accounting year ending in December. Its P&L revenue is taken as the starting total before any adjustment your CPA makes under the entity's revenue definition. The revenue figure is invented; the threshold is the Comptroller's published line for 2026 reports.
Notice what the worked example quietly assumed: a P&L whose revenue line is trustable. That's the books-side condition under all the arithmetic — revenue streams in revenue accounts under one-door discipline, deposits tied to sales rather than double-counted, refunds and processor fees in their own lanes, and the months reconciled and closed so the total is proven rather than provisional. Get that right and the threshold question becomes a lookup on your monthly financial statements — annualized revenue tracking toward or comfortably away from the line all year, not discovered in a panic each May.
The books side
"Are we under $2.65M?" is a question your ledger answers — or can't.
Every year around Texas franchise season, the same scene: an owner asks whether they're under the line, and the books can't say. Revenue is scattered — some in revenue accounts, some sitting as bare deposits, some double-counted through a ballooned holding account, refunds netted invisibly, a processor's fees nowhere. The total the ledger prints is a number, but nobody would stake a filing position on it. That's the real cost of drift-y books in a threshold regime: the state drew a bright line, and you can't tell which side of it you're standing on. Whether you're far below the line or just under it, the deliverable that ends the annual scramble is the same: a revenue number your CPA can rely on without re-deriving it — which is what turns franchise season from a project into a form.
The practical calendar discipline, sized by where you sit: a business tracking well under the line — annualizing comfortably below it — just needs the monthly statements doing their job, because the May question answers itself. A business whose trailing-twelve-months revenue climbs to within a few hundred thousand dollars of the line mid-year is in the zone where the conversation with your CPA should start early, in the fall, not at the deadline — crossing the threshold changes what gets filed and what planning is available, and all of that is their lane with better options the sooner they see the trajectory. The books' contribution to that early conversation is the trajectory itself: a revenue line, current and reconciled, that shows the crossing coming months before it happens.
Can't say today what your annualized revenue is, provably? The free review reads your file and prices the fix — reconciled months, clean revenue lanes, statements monthly — fixed-fee, in writing.
Free books reviewWhy the correction matters
Half the advice online still says $2.47M — date-check everything, including us.
Search the threshold today and you'll find confident pages quoting $2.47M as current — true for 2024–25 reports, stale for 2026. Nobody's lying; the content just outlived its facts, which is the standing hazard of tax-adjacent writing and the reason this post wears its dates on top. Our rule for reading any figure like this one: find the year it claims, find the source it cites, and if either is missing, treat it as folklore. The Comptroller's own pages are the living source for this line; your CPA is the one who applies it to your entity. The date on this post tells you when the figure was last true.
FAQ · Updated October 2026
The questions this piece raises.
If producing a provable revenue total sounds aspirational, that's a books problem with a defined fix — monthly financial statements built on reconciled books make the number a lookup, not a project.