Texas LLC franchise tax forfeiture and reinstatement

Published by Vermilion Vitez Holding LLC, which sells LLC formation and resells registered-agent service fulfilled by Registered Agents Inc.

The steps, in order

1. The filing that gets missed

   The Comptroller of Public Accounts administers the Texas franchise tax, which it describes as a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. The annual report is due May 15, and a report filed after the due date draws a $50 penalty. Besides that penalty, the Comptroller charges a 5 percent penalty when tax is paid 1 to 30 days after the due date and 10 percent when it is paid more than 30 days late. Interest on past due tax begins 61 days after the due date. For report years 2026 and 2027 the no-tax-due threshold is $2,650,000; an entity at or below it owes no tax and files a Public Information Report or Ownership Report. The general due-date and threshold summary for a Texas LLC is on the main site's Texas page; this page covers what happens after the filing is missed.

2. The two forfeiture notices

   The Comptroller sends Form 05-211, Notice of Intent to Forfeit Right to Transact Business, when the current-year filing requirement was missed. It sends Form 05-213, Notice of Forfeiture of Registration, when the prior-year requirement was missed. Either notice is resolved by bringing the franchise tax account current.

3. Step one: the Comptroller

   The Comptroller's reinstatement steps are: file all outstanding annual franchise tax and Public or Ownership Information Reports; pay any tax, penalty, and interest due; then request the tax clearance letter online through Webfile or with Form 05-391. The reports and payment have to be finished before the clearance letter can be requested.

4. Step two: the Secretary of State

   With the clearance letter in hand, the entity submits to the Secretary of State the tax clearance letter (Form 05-377), the SOS reinstatement forms, and the SOS filing fees through SOSPortal. The Secretary of State does not accept a reinstatement without the Comptroller's tax clearance.

5. Why the order matters

   The two agencies hold different records. The Comptroller holds the tax account, and the Secretary of State holds the entity's registration. A reinstatement filed with the Secretary of State before the tax account is clear is incomplete, because the clearance letter is one of the documents the Secretary of State requires.

6. Keeping the registered agent current

   A forfeited entity still has a registered agent on file with the Secretary of State, and that address is where state notices are directed. Vermilion Vitez resells registered-agent service fulfilled by Registered Agents Inc. at $74.25 a year.