Texas Form 05-163: Filing the “No Tax Due” Report in 2026

For small business owners, managing a company requires reliable accounting services in texas to stay compliant with state laws. The Franchise Tax is an annual requirement that must be managed even if no money is owed. While the state has simplified the process, most businesses must still complete specific filings to maintain their Good Standing. For the 2026 tax year, understanding the updated revenue thresholds and the role of Form 05-163 is essential for staying compliant.

Quick Summary: 2026 Texas Filing Checklist

1. The 2026 “No Tax Due” Threshold

The Texas Comptroller adjusts the Franchise Tax threshold every two years. For the 2026 reporting year, the threshold is 2.65 million USD. If your business revenue is at or below this limit, you owe zero tax, but you must still file paperwork with the state to confirm your status.

2. Is Form 05-163 Still Required?

Following recent law changes (SB 3), the rules for small businesses have shifted. Whether you need Form 05-163 depends on your revenue bracket:

• Under 1.23 Million USD: Most businesses in this bracket no longer file Form 05-163; they only file a Public Information Report (PIR).
• Between 1.23M and 2.65M USD: Businesses in this middle bracket generally still file Form 05-163 alongside their PIR.
• Passive Entities: Certain structures may still require Form 05-163 regardless of income level.

3. Maintaining Good Standing

Filing your annual state reports is the only way to keep your business in “Good Standing.” If you miss the deadline, you risk an automatic 50 USD penalty and the potential forfeiture of your business’s legal charter. This can lead to frozen bank accounts and the loss of the limited liability protection that shields your personal assets.

4. How to File Using Texas Webfile

The Texas Comptroller requires that almost all Franchise Tax reports be submitted electronically. You will need your Taxpayer Number and your Webfile Number (a 6-digit code starting with “RT”) to access the system. Filing online provides an immediate digital confirmation, ensuring your business is recorded as compliant in real-time.

Frequently Asked Questions

1. Do I file if I had zero income in 2025?

Yes. Even with zero revenue, you must file your annual Public Information Report (PIR) to maintain your business’s legal standing and avoid the 50 USD late fee.

2. Is there a fee to file these reports?

No state fee is required for filing timely reports electronically. You only incur costs if you miss the May 15 deadline.

3. What if my business is a Partnership?

Partnerships generally file an Ownership Information Report (OIR) instead of the PIR. If your revenue falls in the 1.23M to 2.65M USD bracket, you may still need to file a tax form as well.

4. How do I find my Webfile Number?

It is a 6-digit code usually found on the official tax notices mailed to your business address. If lost, you can contact the Texas Comptroller’s office directly for a replacement.

5. Does this replace my IRS tax return?

No. These are state-level filings for Texas. You must still file your federal income tax returns with the IRS, which are typically due in mid-April.