In July of 2023, the legislative body approved Senate Bill 3, ushering in changes to tax regulations. Notably, the no-tax-due threshold saw an increase, and reporting obligations for specific entities were eliminated. Consequently, the Comptroller's office has adjusted the reporting requirements for certain entities under the franchise tax framework.

No Tax Due Threshold Raised to $2.47 Million Effective for reports due on or after January 1, 2024, the no-tax-due threshold has been raised to $2.47 million.

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Taxpayers Falling Below the No Tax Due Threshold For reports due on or after January 1, 2024, a taxable entity with an annualized total revenue equal to or less than $2.47 million is no longer obligated to submit a No Tax Due Report. However, it remains mandatory for the entity to file either Form 05-102, Public Information Report (PDF), or Form 05-167, Ownership Information Report (PDF).

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In cases of a combined group, all taxable entities must be included in the combined group report, even if any individual member, when considered separately, has an annualized total revenue at or below the no-tax-due threshold. If the combined group's annualized total revenue is at or below the no-tax-due threshold, the group is relieved from submitting a No Tax Due Report, an Affiliate Schedule, or a Common Owner Information Report for that reporting year. Nevertheless, each separate member of the combined group, organized in Texas or having nexus in Texas, is required to file a Public Information Report or Ownership Information Report.

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New Provisions for Veteran-Owned Businesses Effective for reports due on or after January 1, 2024, a qualifying new veteran-owned business is exempted from filing a No Tax Due Report during its initial five-year period.

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Discontinuation of No Tax Due Information Report (Form 05-163) Given that taxable entities falling below the no-tax-due threshold and qualifying new veteran-owned businesses are no longer obligated to submit a No Tax Due Report, the No Tax Due Report for the 2024 reporting year and beyond is discontinued. The form will not be accessible for any new reporting periods.

Entities previously eligible to file a No Tax Due Report, beginning in 2024, will report based on their specific categories:

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1. Taxable Entities with Annualized Total Revenue At or Below the No Tax Due Threshold

2. Qualifying New Veteran-Owned Businesses

3. Qualifying Passive Entities

4. Qualifying Real Estate Investment Trusts (REITs)

5. Taxable Entities with Zero Texas Gross Receipts