You should only exclude from revenue the income items; there is no "exclusion/deduction" for the expense items, because the expense items were not included in revenue. How does a homeowners association that is not exempt from franchise tax compute total revenue for franchise tax reporting purposes?

(C) Taxes imposed by law on the taxable entity itself are not allowed as flow-through funds and cannot be excluded from total revenue. Examples include, but are not limited to, the Texas mixed beverage tax and the Texas franchise tax.

Franchise tax is based on a taxable entity’s margin. Unless a taxable entity qualifies and chooses to file using the EZ computation, the tax base is the taxable entity’s margin and is computed in one of the following ways: ... Total revenue is determined from revenue amounts reported for federal income tax minus statutory exclusions...

March 24, 2025 - However, some businesses are exempt from franchise tax. For instance, a qualifying new veteran-owned business is not subject to Texas franchise tax for the first five years it’s in business. A franchise tax is a tax on the privilege of doing business in the state. Franchise taxes raise revenue ...

Interestingly, businesses using ... roughly three times higher than the average ... A 2013 amendment allows businesses the simple option to deduct $1 million. The original law exempted companies · from paying tax if they had gross revenues of $1 million or less; however, ...

June 1, 2021 - According to Texas Franchise Tax Rule 3.586(f)(1), a business has an economic presence in the state of Texas if the gross receipts from business done in Texas is $500,000 or more. Revenue is determined based on the revenue amounts reported on the Federal income tax return. Exclusions from revenue ...

Franchise tax rates, thresholds and deduction limits vary by report year.

August 1, 2008 - The tax rate under the E-Z computation is 0.575% (TX Tax Code §171.1016). To use the E-Z method a taxable entity must have no more than $10 million of total revenue (after revenue exclusions) from its entire business.

If the tax due is less than $1,000, but annualized total revenue is greater than the no tax due threshold, a franchise tax report supporting that no tax is due (Form 05-158, Texas Franchise Tax Report, or Form 05-169, Texas Franchise Tax EZ Computation Report) must be filed.

In 2006, facing a possible shutdown of Texas · schools, lawmakers enacted a sweeping overhaul · of public school finance. School maintenance and · operations taxes were reduced, but cigarette taxes · were more than tripled and the state’s franchise tax · was revamped in an effort to raise revenues.1 The · state also contributed additional dollars from ·

companies pay a franchise tax equal to the greater of (i) 0.25% of an entity’s net taxable capital · (stated capital plus capital surplus), or (ii) 4.5% of the entity’s net taxable earned surplus (adjusted · federal taxable income plus officer and director compensation). New “Margin” Tax. The new Texas margin tax is imposed on more types of entities, has a · different starting point (revenue), is imposed at a rate of 1% (0.5% for wholesale and retail sellers

October 17, 2025 - The Texas Franchise Tax is calculated on a company’s margin for all entities with revenues above $2,470,000. The margin’s threshold is subject to change each year. The margin can be calculated in one of the following ways: ... Total revenue ...

Exclusions from Revenue: Enter exclusions from revenue for the period upon which the tax is based. See instructions for Item 9 on Form 05-158-A for more information. Gross receipts in Texas: Enter Texas gross receipts for the period upon which the tax is based.

In addition, a corporation in Texas engaged solely in the business of manufacturing, selling, or installing solar energy devices is exempted from the franchise tax. There is no ceiling on this exemption, so it is a substantial incentive for solar manufacturers. Taxable entities with revenues of ...

If a combined group’s annualized total revenue is at or below the No Tax Due Threshold, the combined group is not required to file a No Tax Due Report, an Affiliate Schedule, or a Common Owner Information Report for that report year.

April 1, 2025 - These exclusions include: Federal excise taxes, state and local sales taxes, and state excise taxes if included in gross revenue ... Identifying additional company expenses to include in the Texas deduction for COGS can help reduce the franchise tax.

December 12, 2023 - On the other hand, Sales Tax is collected from customers by businesses selling taxable property. The way these two taxes are calculated isn’t the same. Franchise Tax is calculated based on a company’s margin, with the tax rate varying depending on the type of business. In contrast, Sales Tax is calculated as a percentage of the total revenue reported for federal income tax, with certain exclusions. Taxable entities, whether formed or operating in Texas, must file and pay the Franchise Tax annually by submitting detailed franchise tax and information reports.

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October 29, 2025 - Sales tax and franchise tax are totally different, one is paid by customers and the other by your business for the privilege of operating in Texas. If your revenue is over $2.47M, you must file, even if you don’t owe tax, and the form you ...

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