Texas franchise tax calculator
Texas franchise tax is owed only above $2,650,000 of total revenue for 2026 and 2027 reports. Above it, you pay 0.75% of taxable margin, 0.375% for retail and wholesale, or 0.331% of revenue on the EZ computation. Enter your revenue and deductions to see the estimate.
Updated November 2026
Calculator
For 2026 and 2027 reports. The compensation deduction has a per-person cap, and some items are excluded from revenue. An estimate, not a filed return. An estimate, not tax advice.
How is Texas franchise tax calculated?
Start with total revenue from your federal return. If it's at or under $2,650,000 for a 2026 or 2027 report, you owe nothing, but you still file a Public Information Report or Ownership Information Report.
Above the threshold, you find your taxable margin, which is revenue minus the largest of four deductions:
- 30% of revenue (so margin is 70% of revenue)
- Cost of goods sold
- Compensation, meaning wages and benefits, with a per-person cap
- $1 million
Then you apportion the margin to Texas by the share of your gross receipts from Texas, and multiply by 0.75%, or 0.375% if you're mainly retail or wholesale.
What is the EZ computation?
If your total revenue is $20 million or less, you can skip the deductions and pay 0.331% of apportioned revenue instead. It's simpler, and sometimes cheaper for service businesses with low costs of goods. The calculator shows both and picks the lower one. If the tax works out under $1,000, no tax is due.
When is the report due?
May 15 each year, for the report based on the previous year's accounting period. An extension is available if you request it on time. Our Texas franchise tax guide covers the information reports, the late filing penalty and forfeiture.
Sources
General information, not tax advice for your situation.
Filing a Texas report?
We prepare the franchise report and the information report every May.
See business returnsDo I owe Texas franchise tax if my revenue is under $2.65 million?
No tax is due, but your LLC or corporation still files a Public Information Report or Ownership Information Report by May 15.
Which deduction should I use?
The one that leaves the smallest margin. Service businesses often use compensation or the $1 million deduction, while sellers of goods often use cost of goods sold.
Is the EZ computation always cheaper?
No. It ignores your deductions, so a business with high costs of goods or payroll can pay less on the regular calculation. The calculator compares both.
Does a sole proprietor owe franchise tax?
No. Sole proprietorships and general partnerships owned directly by people aren't subject to it. LLCs, corporations and most limited partnerships are.
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