Texas Franchise Tax No Tax Due Report – Historical Reference and Filing Guidance

Last reviewed: 2025-11-03

Use the Texas Tax Form Calculator Form 05-163: Texas Franchise Tax No Tax Due Report – Historical Reference and Filing Guidance (Texas) as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Texas state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

The Texas Franchise Tax No Tax Due Report (Form 05-163) historically allowed eligible entities to certify that they owed no franchise tax to the State of Texas. This option was available for tax years prior to 2023 when the entity met the no-tax-due threshold of $2,470,000 or otherwise qualified for exemption.

Beginning with reports due on or after January 1, 2024, the No Tax Due Report is no longer accepted. Entities that meet the threshold or qualify for exemption must now file a Public Information Report (Form 05-102) or Ownership Information Report (Form 05-158) as appropriate.

Who Qualified for No Tax Due (through 2023)

• Entities with annualized total revenue ≤ $2,470,000.
• Passive entities meeting criteria under Texas Tax Code §171.0003.
• New veteran-owned businesses for their initial five-year exemption period.
• Entities with no Texas gross receipts during the reporting year.
• REITs and other exempt entities identified under 34 TAC §3.582.

What Replaced Form 05-163

• For reports due in 2024 and after, qualifying entities must file the Public Information Report (PIR) or Ownership Information Report (OIR).
• These filings serve as informational confirmations, ensuring compliance without calculating tax.

Form 05-163 Overview and Historical Use

For many years, the No Tax Due Report functioned as the principal simplified reporting mechanism for entities below the no-tax-due threshold. The report required only entity information, revenue confirmation, and a certification of eligibility. No payment or margin computation was necessary.

Each reporting entity was required to verify its total revenue as calculated under Texas Tax Code §171.1011 and to ensure this amount did not exceed the statutory limit (for 2023, $1,230,000; later $2,470,000).

The form also supported passive entity declarations. Passive entities—those whose income was primarily from investments or interest—were exempt from the franchise tax but still required to submit Form 05-163 as a notice of exemption.

Veteran-owned businesses received exemption under Tax Code §171.0005 for their initial five-year period, also reporting under this form before transitioning to the regular franchise filing system.

Failure to file Form 05-163 during its active years could result in administrative penalties, even if no tax was due. The transition to PIR/OIR simplifies recordkeeping by consolidating informational data into a single franchise reporting framework.

For historical accuracy, entities reviewing legacy filings should retain a copy of their submitted 05-163 and corresponding PIR/OIR filings for audit traceability.

Modern Compliance and Audit Strategy

Although Form 05-163 is discontinued, understanding its structure helps taxpayers evaluate current compliance obligations. Entities should confirm their total revenue under Texas Tax Code §171.1011 and determine eligibility for exemption each year before selecting the appropriate report form.

The no-tax-due threshold remains applicable as a defining compliance parameter. For 2026, the threshold continues at $2,470,000, meaning entities under this amount owe no franchise tax but must still maintain records for review.

During audits, the Texas Comptroller may request prior year documentation (including 05-163 filings) to verify consistent reporting patterns. Retaining prior forms enhances transparency and supports risk-based audit defense.

Businesses previously using the No Tax Due Report should review the Texas Franchise Tax Report (05-158) or EZ Computation Report (05-102) to ensure accurate reporting under current rules.

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Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.