Skip to content
ind-mega-bkgd-1

Insights to Fit Your Industry

Experience the knowledge of our top professionals with timely notifications about industry-specific changes through our insights resource page. 

Subscribe for our monthly e-newsletter as well as our events and webinars.
Let us help you track, manage, and grow. Your best option for trustworthy accounting, tax, and consulting services.
svcs-mega-bkgd

Your journey starts here.

Unlock your financial potential with our team of skilled professionals. We provide clear guidance to keep you compliant, craft smart tax strategies, and harness the power of technology to simplify your processes. Your success is our mission, and we're here to help you achieve your financial goals.
Ready to take that step forward?
Let us help you track, manage, and grow. Your best option for trustworthy accounting, tax, and consulting services.
Texas
Jon Wellington, J.D.June 2, 20251 min read

Filed a Texas Franchise Tax Extension? Here's What You Need to Know.

Filed a Texas Franchise Tax Extension? Here's What You Need to Know.
2:16
If you filed a Texas franchise tax extension, you may think you are off the hook until November 15, but that is not necessarily true.

 

Extensions Give You Time to File—Not to Pay

Most importantly, while an extension allows more time to file the actual report but it does not allow more time to make payment. For most taxpayers (those who owed less than $10,000 in franchise tax last year), your May 15th extension request will only be valid if it includes payment of 100% of the tax due last year or 90% of the tax that will ultimately be due this year.

If you are a first-time filer, the 100% payment option is not available. If you failed to make sufficient payment, penalty and interest apply to any part of the 90% of tax not paid by the original due date. A valid extension is good for six months (November 15th).

 

Owed $10K or More Last Year? The Rules Are Tougher

Taxpayers who owed $10,000 or more in franchise tax in the prior year are required to make payment electronically via Electronic Funds Transfer (EFT) and only get an initial 3-month extension (August 15th).

Such taxpayers can make a second extension by paying an amount equal to the balance of 100% tax due on the actual franchise tax report. This second extension payment is due before August 15th and extends the filing due date through November 15th.

 

What Happens If You Don't Pay Enough?

Failure to meet the above requirements can result in an immediate 5% penalty, followed by another 5% penalty after 30 days (10% total). Interest will continuously accrue on any unpaid balances.

 

The Bottom Line

An extension gives you more time to file, but it doesn’t give you a pass on paying your taxes. If you missed the May 15th deadline, now is the time to pay up and avoid additional penalties and interest.

Need help sorting through it all? Our state and local tax representative, Jon Wellington, is ready to walk you through the process, help you stay on top of any new obligations, and make sure your business is fully compliant.

 


 

To learn more about LGT and how we can serve you, contact us here.

 

avatar
Jon Wellington, J.D.
With nearly 20 years of public service under his belt, Jon is not just any attorney—he's the go-to guru for all things state and local taxation (SALT). Leading our firm’s SALT practice, Jon draws on his vast experience with some of the globe's accounting giants to bring unparalleled expertise to the table. Whether it's audit defense, income and franchise tax planning, sales and use consulting, nexus studies, or property tax minimization, Jon's got you covered. He’s exceptionally well-versed in the unique SALT needs of clients in the construction, manufacturing and distribution, and not-for-profit sectors.
COMMENTS

RELATED ARTICLES