In July 2023, the Texas legislature passed Senate Bill 3, which increased the no tax due threshold and eliminated reporting requirements for certain entities.
No Tax Due Threshold Increased to $2.47 Million from $1.23 Million
For reports originally due on or after Jan. 1, 2024, the no tax due threshold is increased to $2.47 million.
Taxpayers Under the Threshold
For reports originally due on or after Jan. 1, 2024, a taxable entity whose annualized total revenue is less than or equal to $2.47 million is no longer required to file a No Tax Due Report.
However, the Entity is Still Required to file These Forms:
Form 05-102 – Public Information Report or
Form 05-167 – Ownership Information Report
For a combined group – all taxable entities must be included in the combined group report even if any member, on a separate entity basis, has annualized total revenue at or below the no tax due threshold. If a combined group’s annualized total revenue is at or below the no tax due threshold, the combined group is no longer required to file a No Tax Due Report, an Affiliate Schedule, or a Common Owner Information Report for that report year. However, each individual member of the combined group that is organized in Texas or has nexus in Texas must file a Public Information Report or Ownership Information Report.
New Veteran-Owned Businesses
For reports originally due on or after Jan. 1, 2024, a qualifying new veteran-owned business is no longer required to file a No Tax Due Report during its initial five-year period.
The No Tax Due Information Report (Form 05-163) is Discontinued
There were five types of entities eligible to file a No Tax Due Report. Beginning in 2024, each of these entities will no longer have to file this report.
- Taxable Entities with Zero Texas Receipts
- Taxable Entities with Annualized Total Revenue at or Below the No Tax Due Threshold
- Qualifying New Veteran-Owned Businesses
- Qualifying Passive Entities
- Qualifying Real Estate Investment Trusts (REITs)
Stay tuned for more information on the filing of the Public Information Report that all entities registered in Texas still need to file. The good news is that many small businesses will not have to file the No Tax Due Report and since the no tax due threshold is increased, most taxpayers who are subject to the tax should see a decrease in the amount of tax due.
We at theKFORDgroup are here to assist you with any questions you may have. For additional information, please call us at 210-340-8351.