Texas LLC Tax Filing: Forms & Deadlines (2026)

Q: Does a Texas LLC pay state income tax?

No. Texas has no personal income tax and no corporate income tax on LLCs. Instead, a Texas LLC is subject to the state franchise tax administered by the Texas Comptroller, though for report years 2026 and 2027 an entity with annualized total revenue at or below $2,650,000 owes no franchise tax and only files an information report.

Q: How is a Texas LLC taxed federally?

By default the IRS treats a single-member Texas LLC as a disregarded entity, reporting income on the owner's Schedule C, and a multi-member LLC as a partnership filing Form 1065 with Schedule K-1s. An LLC may instead elect C-corporation treatment on Form 8832 or S-corporation treatment on Form 2553.

Q: When is the Texas franchise tax report due?

The annual franchise tax report is due May 15 each year. If May 15 falls on a weekend or holiday, the due date moves to the next business day. Entities at or below the no-tax-due threshold must still file a Public Information Report (Form 05-102).

Q: What is the Texas franchise tax rate?

For entities above the no-tax-due threshold, the franchise tax rate is 0.75% of taxable margin for most businesses and 0.375% for those primarily engaged in retail or wholesale trade. An optional EZ computation applies a 0.331% rate to total revenue for entities with $20 million or less in total revenue.

Q: Does a Texas LLC need a sales tax permit?

If the LLC sells taxable goods or services in Texas, it must obtain a Texas sales and use tax permit from the Comptroller before making sales. The permit is free. The state sales tax rate is 6.25%, and local taxing jurisdictions may add up to 2%, for a combined maximum of 8.25%.

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

A Texas LLC pays no state income tax, but it must file an annual franchise tax report with the Texas Comptroller by May 15. Federally, the IRS taxes it by default as a disregarded entity (Schedule C) or a partnership (Form 1065); for 2026 an LLC with annualized revenue at or below $2,650,000 owes no franchise tax.

Quick Answer

State income tax: None - Texas has no personal or LLC income tax
State-level tax: Franchise tax (Comptroller); no-tax-due threshold $2,650,000 for 2026–2027
Franchise due date: May 15 annually (report required even if $0 tax)
Federal default: Disregarded entity (1-member) or partnership (multi-member)
S-corp election: Optional via IRS Form 2553 → Form 1120-S
Sales tax: 6.25% state + up to 2% local (max 8.25%); permit is free

How a Texas LLC Is Taxed: The Two Layers

Understanding LLC taxes in Texas means separating two layers. The first is federal tax, set by the IRS, which treats the LLC as a pass-through by default. The second is state tax, which in Texas is unusual: there is no personal income tax and no ordinary corporate income tax, so the only broad state-level business levy is the franchise tax, plus sales and use tax if you sell taxable items. An LLC is a creature of state law but a tax "chameleon" federally - the same limited liability company can be taxed four different ways depending on its membership and any elections it makes. This guide walks through both layers, the forms, and the deadlines. For the national picture, see business tax and how to file business taxes.

Federal Default Classification

The IRS does not have an "LLC" tax return. Instead, an LLC is assigned a default classification based on how many members it has:

Single-member LLC - treated as a disregarded entity. The business is ignored for federal income tax; the owner reports profit or loss on Schedule C filed with their Form 1040. See single-member LLC for detail.
Multi-member LLC - treated as a partnership. The LLC files an informational return, Form 1065, and issues a Schedule K-1 to each member, who reports their share on their personal return.

In both defaults, the profit flows through to the members and is taxed at individual rates. No income tax is paid at the entity level, which avoids the "double taxation" of a C corporation. Members who are active in the business also pay self-employment tax of 15.3% (Social Security and Medicare) on their share of earnings, reported on Schedule SE. Because Texas has no state income tax, there is no corresponding Texas personal return.

Electing Corporate or S-Corp Treatment

An LLC can override its default by filing an election with the IRS. It can choose to be taxed as a C corporation by filing Form 8832, or as an S corporation by filing Form 2553. An S-corp election keeps pass-through treatment but lets owner-employees split income between reasonable W-2 wages (subject to payroll tax) and distributions (not subject to self-employment tax), which can lower payroll taxes once profits are high enough. An S-corp LLC files Form 1120-S; a C-corp LLC files Form 1120. Whether the election saves money depends on profit level, payroll costs, and administrative burden - see S-corp vs LLC and LLC vs S-corp tax before electing, and note that Texas franchise tax still applies regardless of the federal election.

Texas Franchise Tax

The Texas franchise tax is a privilege tax on entities that do business in Texas, including LLCs, administered by the Texas Comptroller of Public Accounts - not the Secretary of State. It is Texas's substitute for a corporate income tax, but it is calculated on a business's margin, not net income. Every taxable LLC has an annual obligation even when no tax is owed.

For report years 2026 and 2027, an entity whose annualized total revenue is at or below the $2,650,000 no-tax-due threshold owes no franchise tax. Because most small LLCs fall under this threshold, they pay $0 in franchise tax but must still meet the filing requirement. Entities above the threshold compute tax on their taxable margin - generally the lowest of total revenue minus cost of goods sold, total revenue minus compensation, 70% of total revenue, or total revenue minus $1 million.

Business type	Franchise tax rate (2026)
Retail or wholesale trade (primarily)	0.375% of taxable margin
All other businesses	0.75% of taxable margin
EZ computation (total revenue ≤ $20M, optional)	0.331% of total revenue

Franchise Report Forms and the May 15 Deadline

The annual franchise tax report is due May 15 each year; if the 15th falls on a weekend or holiday, it moves to the next business day. What you file depends on your revenue:

At or below the no-tax-due threshold: beginning with the 2024 report year, the Comptroller eliminated the No Tax Due Report. You no longer file a No Tax Due form, but you must still file an information report - Form 05-102 (Public Information Report) for most LLCs, or Form 05-167 (Ownership Information Report).
Above the threshold: file the full franchise tax report (long form 05-158 or EZ form 05-169) plus the Public Information Report, and pay tax on your margin.

Reports are filed electronically through the Comptroller's Webfile system. Missing the deadline triggers penalties and interest, and continued non-filing can cause the entity to forfeit its right to transact business in Texas and lose liability protection for its managers until it reinstates. Keeping the franchise account current is the single most important ongoing Texas tax task for an LLC.

Texas Sales and Use Tax

If your LLC sells taxable goods or certain services in Texas, you must register for a Texas sales and use tax permit with the Comptroller before making sales. The permit is free. The state sales tax rate is 6.25%, and local jurisdictions (cities, counties, transit authorities, special districts) may add up to 2%, for a combined maximum of 8.25%. You collect tax from customers and remit it to the Comptroller on a monthly, quarterly, or annual schedule assigned based on your sales volume. Sales tax is separate from franchise tax and from federal income tax - many LLCs deal with all three. For the formation side of registering, see how to form an LLC in Texas.

Federal Filing Deadlines

Federal return deadlines depend on the LLC's classification. Members who owe $1,000 or more in tax generally must also make quarterly estimated tax payments (typically April 15, June 15, September 15, and January 15).

Classification	Federal form	Deadline (calendar-year)
Single-member (disregarded)	Schedule C with Form 1040	April 15
Multi-member (partnership)	Form 1065 + K-1s	March 15
S-corporation election	Form 1120-S + K-1s	March 15
C-corporation election	Form 1120	April 15

See when business taxes are due and Form 1120 vs 1120-S vs 1065 for how these returns differ.

EIN and Tax Registration Steps

Before filing anything, most Texas LLCs need a federal Employer Identification Number (EIN), which the IRS issues for free. An EIN is required if the LLC has more than one member, has employees, or elects corporate/S-corp treatment; even a single-member LLC usually gets one to open a business bank account. With the EIN in hand, set up your Texas Comptroller Webfile account for franchise tax and, if applicable, apply for the sales tax permit. See how to get an EIN for an LLC to complete this step.

Frequently Asked Questions

Does a Texas LLC pay state income tax?

No. Texas has no personal income tax and no LLC income tax. The state-level obligation is the franchise tax, but for 2026–2027 an entity with annualized revenue at or below $2,650,000 owes no franchise tax and only files an information report.

How is a Texas LLC taxed federally?

By default the IRS treats a single-member LLC as a disregarded entity (Schedule C) and a multi-member LLC as a partnership (Form 1065). The LLC can instead elect C-corp (Form 8832) or S-corp (Form 2553) treatment.

When is the Texas franchise tax report due?

May 15 each year, moving to the next business day if the 15th is a weekend or holiday. Even entities below the no-tax-due threshold must file a Public Information Report (Form 05-102).

What is the Texas franchise tax rate?

0.75% of taxable margin for most businesses, 0.375% for retail or wholesale trade, or an optional 0.331% EZ rate on total revenue for entities with $20 million or less in total revenue.

Does a Texas LLC need a sales tax permit?

Yes, if it sells taxable goods or services in Texas. The permit is free from the Comptroller. The state rate is 6.25%, plus up to 2% local tax, for a combined maximum of 8.25%.

Sources

Texas Comptroller - Franchise Tax ($2,650,000 no-tax-due threshold for 2026–2027; May 15 due date; rates).
Texas Comptroller - Franchise Tax Filing Requirements (Public Information Report / Form 05-102; 2024 change).
Texas Comptroller - Franchise Tax Forms (Forms 05-102, 05-158, 05-169).
Texas Comptroller - Sales and Use Tax (6.25% state rate; combined 8.25% maximum).
Texas Comptroller - Sales Tax Permit (free permit; who must register).
Texas Comptroller - Texas Taxes overview (no personal income tax).
Texas Tax Code - Chapter 171, Franchise Tax.
Texas Tax Code - Chapter 151, Limited Sales, Excise and Use Tax.
IRS - Limited Liability Company (LLC) (default classification).
IRS - About Form 1065 (partnership return, March 15 deadline).
IRS - About Schedule C (Form 1040) (disregarded-entity reporting).
IRS - About Form 2553 (S-corporation election).
IRS - About Form 8832 (entity classification election).
IRS - Self-Employment Tax (15.3% rate).
IRS - Estimated Taxes (quarterly payment dates).
Cornell LII - 26 U.S.C. § 1361 (S corporation defined).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, rates, and thresholds change; verify current requirements with the Texas Comptroller and the IRS before acting.