How to Close out Your Texas Franchise Tax Account

Learning how to close out your Texas Franchise Tax Account will save you on unnecessary late fees. Closing out your Texas franchise tax account is an important and separate step after you close your sales tax account.

You will need both your Texas Taxpayer Number and your Texas Webfile Number:

Texas Taxpayer Number – An 11-digit number issued by the state and also known as your permit number

Your Checklist to Close out Your Texas Franchise Tax Account

Texas Webfile Number – A WebFile number is a number attached to the returns being mailed from the state. It is located in the top left corner of the letter/return and begins with either RTxxxxxx or XTxxxxxx. If you did not receive a tax report/letter yet, you can call the Texas Comptroller’s electronic reporting system 1-800-442-3453 to get your webfile number.

Here is the Process to Close Out Your Texas Franchise Tax Account:

  1. Go to https://mycpa.cpa.state.tx.us/securitymp1portal/displayLoginUser.do and login with the username and password.
  2. Select “WebFile/Pay Taxes and Fees” and fill in the required information
  3. Once you have entered the webfile number, you will see a list of returns that you need to file
  4. Once you have filed all the returns, call the state and request for a final return. Their phone number is 800-252-5555. They will update your account within 24-48 hours. After such time, when you log back into your account, you will see a final return.
  5. If you are not registered with the Secretary of State, the state will advice to send a letter to them stating that you have closed out your business on this date and that you are opting to end all your tax responsibility in the state. Their mailing address is at PO Box 149348, Austin, TX 78714
  6. If your business is registered with the Secretary of State, you need to request a Certificate of Termination.
    1. Once you receive the certificate of Termination, you will send it to the Secretary of State to end all your tax responsibility in the state

Texas Franchise Tax Account Note: The penalties on the Franchise tax reports is basically a 5% if the reports filed beyond the due date for any tax that would be due. The flat fee for not filing the report by the due date, that’s the $50 late filing penalty. You may qualify for a “No-Tax Due” filing. In order to qualify for the No-Tax Due filing, the company’s total revenue both in and out of Texas or the gross revenue would need to be below $1,110,000. In filing a No Tax Due report, you would need the following info:

  1. Accounting year begin date
  2. Accounting year end date
  3. Does your entity have zero Texas Gross Receipts
  4. Total Revenue (both in and out of Texas)

You can also file Franchise Tax return via mailing the paper forms to Texas.

The forms that you need to complete are as follows:

  1. Texas Franchise Tax Public Information Report (Form 05-102)
    1. Annual
  2. Texas Franchise Tax No Tax Due Report (Form 05-163) (If you are qualified for a No-Tax-Due)
    1. Annual
    2. Final
  3. Request for Certificate of Account Status to Terminate a Taxable Entity’s Existence in texas or Registration (Form 05-359)

Once the forms have been filed (online/via paper) the state will process within 4-6 and will send correspondence via mail after the time frame.

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