Texas Franchise Tax Filing: May 15, 2026 Deadline & New Rules
What’s due today and who actually owes it
Texas franchise tax filing is the annual report every “taxable entity”. Doing business in Texas must submit to the Texas Comptroller of Public Accounts. Taxable entities include corporations, LLCs, partnerships, business trusts, professional associations, business associations, joint ventures, and other legal entities. Sole proprietors are not taxable entities for franchise tax purposes. General partnerships owned exclusively by natural persons are not taxable entities either. Everyone else with a Texas connection probably is.
If your entity’s annualized total revenue for the 2025 federal tax year was at or below $2.65 million, you owe no franchise tax — but you still have to file. The “no tax due”. Report (Form 05-163) is a one-page declaration that gets your entity right with the Comptroller. Skip it and the entity goes into forfeiture. The right to do business in Texas is suspended, your veil-piercing protection evaporates for any cause of action arising during forfeiture, and reinstatement requires back filings plus a $50 fee.
Above $2.65 million in annualized total revenue, you actually compute and pay the tax. The two main calculation methods are still 0.375 percent for retail and wholesale, 0.75 percent for everything else, applied to taxable margin. Taxable margin is the lesser of: 70 percent of total revenue. Total revenue minus cost of goods sold. Total revenue minus compensation. Or total revenue minus $1 million. That fourth option — the $1 million standard deduction — is what makes Texas franchise tax filing tolerable for most mid-sized businesses.
Quick check this morning: if you formed a Texas LLC in 2024 to hold a vacation rental and never filed franchise tax because “there was nothing to pay,”. Go file Form 05-163 today. The no-tax-due threshold protects you from owing money, not from the filing obligation itself. Forfeiture is silent until you try to sell or borrow against the property and the title company finds out.
The three 2026 changes to Texas franchise tax filing that matter
The no-tax-due threshold is now $2.65 million
For 2026 report year filings, the no-tax-due threshold is $2.65 million in annualized total revenue. That’s up from $2.65 million for the 2025 report year, an inflation adjustment Texas runs every two years on odd-numbered cycles. The change matters because mid-sized service businesses — a Texas dental practice with three doctors, a small-but-growing tech consulting firm, a single-state plumbing company — that crossed $2.5 million in 2025 may still be under the new threshold for the 2026 report year. Before computing tax, check the threshold against the actual annualized revenue figure.
Annualized total revenue is not the same as gross receipts. It’s total revenue from the franchise tax return, divided by the number of days in the federal period, multiplied by 365. For a short period, annualization can push an entity over the threshold that would have stayed under it on an unannualized basis. A Texas LLC formed in July 2025 with $1.5 million of revenue from July to December would have an annualized figure close to $3 million, putting it above the no-tax-due threshold despite intuitively feeling like a smaller business.
Current-year IRC conformity replaces fixed-date conformity
Beginning with the 2026 franchise tax report, Texas adopted current-year Internal Revenue Code conformity for determining amounts from the federal tax return. Before 2026, Texas used a fixed conformity date (most recently January 1, 2007 with selective updates) — so federal tax law changes after that date didn’t flow through to the Texas franchise tax base unless the legislature specifically picked them up. Under the 2026 rule, the Comptroller pulls federal numbers as they appear under federal law in effect for the actual federal tax year being reported.
This matters because of the One Big Beautiful Bill Act (OBBBA, signed July 4, 2025). OBBBA reinstated 100 percent bonus depreciation, accelerated R&D expensing back to immediate deduction, raised Section 179, and made many TCJA provisions permanent. Before current-year conformity, none of those changes would have flowed into a Texas franchise tax filing. Now they do — which means total revenue, cost of goods sold, and compensation may all carry different federal numbers than they would have under the old fixed-conformity regime. If your Texas franchise tax filing for the 2026 report year was prepared on the assumption that federal and Texas numbers diverge in familiar ways, double-check. They might not diverge anymore.
Broadcaster COGS deduction is new under TX SB 263
Texas SB 263, signed by Governor Abbott on June 20, 2025 and effective immediately, lets television and radio broadcasters claim a cost of goods sold reduction on Texas franchise tax filings starting with the 2026 report year. The provision treats broadcasting content production costs as deductible cost of goods sold for franchise tax purposes, similar to how movie and television production companies have been treated under prior Texas law. This is narrow — it’s for broadcasters specifically, not for streaming platforms or podcast producers — but for the affected entities the savings are material.
The interaction with the one-time net depreciation adjustment in COGS, which Texas also rolled out for the 2026 report year, means broadcasters with significant equipment investments in 2024 or 2025 could see a meaningful tax reduction in their first 2026 Texas franchise tax filing. Most broadcasters use third-party industry-specialist preparers. If you’re a Texas-resident shareholder of a broadcasting entity that uses a generalist preparer, ask the question.
What NYC clients with Texas exposure should check today
Many Reedcorp clients have Texas connections — a Texas LLC holding a Houston duplex, a Texas S-corp from a brief residency-flip attempt that never fully wound down, a Texas LLC member interest in a private equity fund, a Texas C-corp subsidiary of an NYC parent. Each one requires a Texas franchise tax filing.
Texas LLCs holding a single rental property
The most common Reedcorp Texas exposure is a single-purpose LLC formed to hold a Houston, Dallas, or Austin rental property — usually after a real estate broker told the client an LLC was “the right way”. To hold rental property. Most such LLCs have under $100,000 in annual rental revenue and qualify for the no-tax-due threshold. They still have to file Form 05-163. We see one or two clients per year discover, in the middle of a refinance or sale, that their Texas LLC was forfeited because nobody filed the no-tax-due report for three years running. Reinstatement is doable but it delays the closing. File today.
Texas residency-flip entities that didn’t fully migrate
Clients who attempted a Texas residency flip — most commonly between 2020 and 2023, during the high-tax-state exodus narrative — sometimes left behind a Texas operating entity even after they moved back to New York or never fully established Texas residency to begin with. Those entities still file Texas franchise tax. If the underlying client is now physically based in NYC, the entity is still a Texas entity until it’s affirmatively dissolved or moved. Our residency-flip guide covers the cleanup process for clients who tried this and want to wind down cleanly.
Out-of-state preparers handling Texas franchise tax filing
Texas franchise tax filing is not New York State franchise tax. It’s not California Franchise Tax Board tax. It’s not Delaware franchise tax. The mechanics, the forms, the calculation methods, and the deadlines are different from every other state. A Manhattan-based generalist CPA who handles 95 percent NY-source clients and runs into a Texas entity once a year may not know about the 2026 IRC conformity change, the broadcaster COGS deduction, or the threshold update. Confirm before signing the return.
Reedcorp’s take: Texas franchise tax filing is the cheapest, simplest state filing of any major state — for entities below the threshold. Above the threshold, the calculation gets complicated quickly because Texas runs four parallel margin calculations and you take the lowest. Most generalist NY-based preparers do not tune the margin calculation. We routinely see Texas franchise tax filings where compensation was used as the deduction when COGS would have produced a smaller tax bill, or where the $1 million standard deduction was used when 70 percent of revenue would have. Spend ten minutes running all four — the math matters.
What trips clients up on Texas franchise tax filing
Four recurring issues:
The franchise tax is not the same as the public information report. Texas requires two filings: the franchise tax report (Form 05-158 or 05-163) and the Public Information Report (Form 05-102 or 05-167 depending on entity type). Both are due May 15. Filing only the franchise tax report and skipping the PIR is one of the most common ways a Texas LLC ends up in forfeiture status. The Comptroller treats the PIR as a separate compliance obligation, not an attachment.
Single-member LLCs taxed as disregarded entities still file. A single-member Texas LLC owned by an individual is a disregarded entity for federal income tax purposes. For Texas franchise tax purposes, it is a separate taxable entity. The federal “disregarded”. Treatment does not apply at the state level. The most common Reedcorp scenario: a NYC client forms a Texas LLC to hold a property, never files anything because “the IRS doesn’t care about it,”. And three years later it’s forfeited. Texas cares.
The Webfile system requires the right entity number. Texas Comptroller’s Webfile system identifies entities by their 11-digit taxpayer number, not the federal EIN. Out-of-state preparers sometimes try to log in with the EIN and conclude the system is broken. Look up the Texas taxpayer number on the Comptroller’s online lookup before attempting to file.
The May 15 deadline is hard. Texas franchise tax filing extension is automatic for 90 days if you request it on Form 05-164 by May 15 and pay 90 percent of the tax owed (or 100 percent of the prior year’s tax) with the extension request. The extension is to August 15. There is no second extension. Miss August 15 and you owe penalties and the loss of the right to file electronically.
Open questions and what to watch next
The biggest open question for Texas franchise tax filing in 2027 is whether the legislature continues raising the no-tax-due threshold. Texas raised the threshold from $1.23 million to $2.65 million between 2024 and 2025, and now to $2.65 million for 2026. Some legislators have proposed raising it to $5 million by 2028, which would effectively exempt nearly every small business from any Texas franchise tax computation other than the no-tax-due report. Whether that proposal advances depends on Texas budget conditions and pressure from larger taxpayers who’d see no benefit but might pay relatively more.
The IRC conformity change also creates a new compliance issue: federal tax law changes more frequently than Texas franchise tax law has historically tracked, and any federal change that increases or decreases income flows directly into Texas margin. A federal R&D capitalization repeal that gets retroactive treatment for 2025 returns could create amended Texas filings nobody anticipated when the original 2026 report year filing went out today. Build a process for federal-amendment-to-Texas-amendment cascades into your year-round workflow.
And keep an eye on the broadcaster COGS provision. The Texas legislature has a habit of expanding industry-specific COGS rules once the first one proves it can pass without exploding revenue. If broadcasters did fine under SB 263, expect proposals for streaming platforms, esports, and creator-economy entities in the next session.
How The Reed Corporation works with clients on Texas franchise tax filing
Texas franchise tax filing is rarely the main reason a Reedcorp client engages us. It comes up because the client has a Texas exposure inside a broader federal-and-multistate planning picture: a New York-based real estate operator with Houston and Dallas properties, an NYC-based PE fund with Texas portfolio investments, a former Manhattan client who moved to Austin during the pandemic and now has assets in both states. For those clients, Texas franchise tax filing is one box to check inside an annual compliance run that already includes federal, New York State, New York City, and often California or New Jersey.
We run the four-method margin calculation routinely — total revenue minus COGS, total revenue minus compensation, 70 percent of total revenue, and total revenue minus $1 million — and pick the lowest. We file the Public Information Report alongside the tax report. We catch the no-tax-due-but-still-have-to-file scenario before the entity goes into forfeiture. And we coordinate the Texas filing against the federal return so that any federal amendment cascades cleanly into Texas.
For NYC clients with multistate exposure, this is one of half-a-dozen state filings we handle in May. Related background lives in our Texas Emergency Prep Sales Tax Holiday note, our Texas/Florida residency-flip guide, and our multi-state remote work tax overview. If your Texas entity needs cleanup before it’s worth refinancing or selling the property, see our business management service or business owner practice.
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Frequently asked questions
Who has to do a Texas franchise tax filing in 2026 and what happens if you skip it?
Texas franchise tax filing is required for every “taxable entity”. That did business in Texas during the calendar year preceding the report year, regardless of whether any tax is actually owed. Taxable entities include corporations, S corporations, professional corporations, professional associations, limited liability companies (LLCs), limited partnerships, business trusts, professional associations, joint ventures (in most cases), and most other legal entities organized under Texas law or doing business in Texas. The list of non-taxable entities is short: sole proprietorships, general partnerships owned exclusively by natural persons (not entities), passive entities meeting strict criteria, certain unincorporated political committees, and qualified grantor trusts. If you are not on the short non-taxable list, you have a Texas franchise tax filing obligation, period.
The “doing business in Texas”. Trigger is broader than many out-of-state preparers realize. A Texas franchise tax filing is required if the entity was formed in Texas, is registered to do business in Texas, or has nexus with Texas under any other legal theory — physical presence of employees or property, regular solicitation of customers, ownership of Texas real estate, or, since 2020, economic nexus based on $500,000 or more of Texas-source revenue. An NYC-based LLC with no Texas formation but $600,000 of annual revenue from Texas-based customers can have a Texas franchise tax filing obligation through economic nexus alone, even with no physical Texas footprint. The Comptroller has been increasingly active in tracking economic nexus through sales data, and a missed Texas franchise tax filing under economic nexus is a different and harder problem to clean up than a missed filing for a Texas-formed entity.
If you skip your Texas franchise tax filing, the entity goes into forfeiture status. The Comptroller will first send a delinquency notice, then if no response, declare the entity’s right to do business in Texas forfeited. Forfeiture has three immediate practical consequences: the entity loses its standing to sue in Texas courts (it can still be sued, but cannot enforce contracts or pursue litigation as a plaintiff). The limited liability protection of LLC or corporate form is pierced for any cause of action arising during the forfeiture period, exposing officers and directors personally. And the Secretary of State and Comptroller will refuse to file any document — including a dissolution, merger, or amendment — until the forfeiture is cured. The forfeiture cure requires filing all back franchise tax reports (with penalties and interest), paying any tax owed, and submitting a reinstatement application with a $50 fee. The veil-piercing exposure during the forfeiture period does not cure with reinstatement. If a contract was breached or a tort committed while the entity was forfeited, the officer and director can be held personally liable even years later.
For Reedcorp clients with Texas LLCs holding single rental properties, this is the most common Texas franchise tax filing failure pattern. The client formed the LLC because a real estate broker said “always hold real estate in an LLC,”. Never produced revenue above the no-tax-due threshold, and assumed Texas franchise tax filing didn’t apply because there was no tax to pay. Three years later, when the client tries to sell the property or take out a HELOC, the title company runs an entity status check, discovers the forfeiture, and pauses the closing. The cleanup typically takes 30 to 60 days, costs $500 to $1,500 in back filings and fees, and delays whatever transaction was supposed to close. The fix is simple: file the no-tax-due Texas franchise tax filing report (Form 05-163) every year, even when there’s nothing to pay. Texas franchise tax filing exists as much to keep the Comptroller’s database current as to collect revenue.
What is the May 15, 2026 Texas franchise tax filing deadline and how does the extension work?
The May 15, 2026 Texas franchise tax filing deadline is the date by which every taxable entity with a calendar-year accounting period must submit either the franchise tax report (Form 05-158) for entities owing tax, the no-tax-due report (Form 05-163) for entities below the $2.65 million annualized total revenue threshold, or an extension request (Form 05-164) buying an additional 90 days. Entities with fiscal years other than calendar year have different Texas franchise tax filing deadlines, generally the 15th day of the fifth month after the close of the fiscal year. For the vast majority of Texas entities — which use a calendar year — May 15 is the operative deadline, every year.
The Texas franchise tax filing extension is the most generous extension regime of any major state. Form 05-164, submitted by May 15 along with a payment of at least 90 percent of the tax owed for the current report year or 100 percent of the tax paid for the prior report year, automatically extends the filing deadline to August 15. The extension is automatic — no approval required, no narrative justification, no penalty. The catch is the payment requirement: you have to estimate your tax liability and pay the safe harbor amount with the extension. Filing Form 05-164 without the payment does not get you a valid extension. It gets you treated as a late filer.
If the May 15 Texas franchise tax filing extension and payment are made correctly, the extended deadline of August 15 is hard — there is no second extension. Entities that miss the August 15 extended deadline owe a 5 percent late filing penalty (10 percent if more than 30 days late), 1 percent monthly interest on any unpaid tax, and loss of the right to use Webfile for electronic filing. The combination can turn a $5,000 franchise tax bill into a $6,500 bill quickly. For larger Texas franchise tax filings — entities with $10 million or more in revenue — penalty and interest stack-up can be material.
For Reedcorp clients who routinely file Texas franchise tax filings on extension because federal and state numbers aren’t finalized by mid-May, the standard practice is to file Form 05-164 with a payment based on 100 percent of the prior year’s Texas franchise tax. This is the cleanest safe harbor — no estimation required, just look up what you paid last year. The disadvantage: if current-year tax is meaningfully lower than prior year, you’ve prepaid more than you owe and have to wait for a refund. The advantage: zero risk of penalty for underpayment of the extension. For most Texas franchise tax filings under $50,000 in annual tax, the prior-year safe harbor is the right default. For larger filings or filings where the prior year’s results are not representative, computing the 90 percent of current year estimate is worth the effort. The May 15 Texas franchise tax filing deadline is also the deadline for the Public Information Report (Form 05-102 or 05-167), and the extension covers the PIR as well — filing Form 05-164 extends both reports to August 15 in tandem.
How is Texas franchise tax filing margin calculated and which method gives the lowest tax?
Texas franchise tax filing requires computing “taxable margin”. Using whichever of four parallel calculation methods produces the smallest number. The four methods are: (1) total revenue minus cost of goods sold (COGS). (2) total revenue minus compensation. (3) 70 percent of total revenue. And (4) total revenue minus $1 million. Whichever method generates the lowest taxable margin is the one you use for the Texas franchise tax filing — you do not have to use the same method year over year, and you should genuinely compute all four every time. The franchise tax rate is then 0.375 percent for entities primarily engaged in retail or wholesale trade and 0.75 percent for everyone else, applied to the lowest of the four margin figures.
The total-revenue-minus-COGS method is best for entities with high cost of goods relative to revenue — manufacturers, distributors, retailers, contractors who buy materials. COGS for Texas franchise tax filing purposes is defined broadly and includes labor and certain overhead, with specific Texas rules that don’t always match federal COGS treatment. The 2026 broadcaster COGS deduction under TX SB 263 expanded the definition for broadcasting entities. The 2026 one-time net depreciation adjustment lets entities pull depreciation into COGS for qualifying assets. For a Texas retailer with $5 million in revenue and $3 million in COGS, this method generates $2 million in taxable margin and a tax of $7,500 at the 0.375 percent rate. The other methods would yield higher results.
The total-revenue-minus-compensation method is best for services businesses with high labor costs and minimal physical inventory — professional services firms, software companies, consulting practices. Compensation for Texas franchise tax filing purposes includes wages, salaries and the value of employee stock options, capped at $400,000 per employee for 2026. A Texas dental practice with $4 million in revenue and $2.2 million in compensation generates $1.8 million in margin, tax of $13,500 at the 0.75 percent rate (non-retail/wholesale). For services businesses crossing the $2.65 million no-tax-due threshold, compensation is usually the lowest-margin method.
The 70 percent of total revenue method is the simplest — you take 70 percent of your total revenue, end of calculation — and is best when COGS and compensation are both low relative to revenue. A Texas LLC with $3 million in passive licensing revenue, $50,000 in COGS, and $100,000 in compensation generates $2.85 million in unannualized revenue. Total revenue minus COGS = $2.95 million. Total revenue minus compensation = $2.9 million. 70 percent of total revenue = $2.1 million. Total revenue minus $1 million = $2 million. The fourth method wins — $2 million in margin, $15,000 in tax. The 70 percent method is rarely the lowest, but it’s worth computing every time. Texas franchise tax filing is one of the few state taxes where the calculation method choice can change the tax by 30 percent or more on the same underlying business, so generalist preparers who default to one method are leaving money on the table. The right Texas franchise tax filing process is to run all four methods, document the comparison in the workpaper file, and choose the lowest defensibly. For the 2026 report year, the IRC conformity update and the broadcaster COGS provision may flip which method is lowest compared to prior years — re-run the math fresh, don’t carry over last year’s choice.
The 2026 Texas franchise tax filing IRC conformity update is the largest underlying-law change to Texas franchise tax in over a decade. Before the 2026 report year, Texas used “fixed-date”. Conformity to the Internal Revenue Code — Texas franchise tax filings followed federal law as it existed on a specific historical date, with the legislature periodically updating that date and selectively adopting (or not adopting) intervening federal changes. The most recent fixed conformity date was January 1, 2007, with selective updates for major federal changes that the Texas legislature explicitly picked up. This meant federal tax law changes after 2007 did not flow into Texas franchise tax filings unless the Texas legislature affirmatively adopted them.
Starting with the 2026 Texas franchise tax filing report year, Texas converted to current-year IRC conformity. The Comptroller now determines amounts from the federal tax return under federal law in effect for the actual federal tax year being reported. For the 2026 Texas franchise tax filing (covering federal 2025 results), this means OBBBA — the One Big Beautiful Bill Act signed July 4, 2025 — flows directly into the Texas franchise tax base for the first time. OBBBA reinstated 100 percent bonus depreciation for property placed in service after January 19, 2025. Accelerated R&D expensing under Section 174 back to immediate deduction starting with 2025. Raised the Section 179 deduction to $2.5 million with a $4 million phase-out threshold. Permanently extended the 20 percent qualified business income deduction (QBID) for pass-through entities. And reinstated several other expiring provisions.
For Texas franchise tax filing purposes, the practical impact is most pronounced on cost of goods sold (COGS) and the compensation deduction. OBBBA bonus depreciation increases the depreciation component of COGS for entities using the total-revenue-minus-COGS method. R&D expensing returns to immediate deduction, which affects both compensation (for R&D wages) and COGS (for R&D-related capitalized costs). The interaction with the Texas 2026 one-time net depreciation adjustment is intentional — taxpayers can include a one-time adjustment in COGS as an equitable remedy for any gain reported on the federal return in excess of what historically would have been determined for Texas franchise tax purposes. The legislature designed this transition rule specifically to smooth the conversion from fixed-date to current-year conformity.
The audit and compliance implications of the 2026 Texas franchise tax filing IRC conformity change are still developing. For the 2026 report year, the Comptroller has signaled relatively lenient enforcement on first-year transition issues, but the conformity update creates a new class of audit issue: entities that prepared 2026 Texas franchise tax filings using the old fixed-date conformity logic, either out of habit or because the preparer didn’t catch the change, will be exposed to underpayments or overpayments depending on which way OBBBA pushed the federal numbers. For Reedcorp clients with Texas entities, the right approach for the 2026 Texas franchise tax filing is to confirm with the preparer that the IRC conformity update was applied, that OBBBA provisions were correctly reflected, and that the one-time net depreciation adjustment was considered. The Texas franchise tax filing for 2027 will not have the transition relief, so any clean-up needs to happen in this year’s report. Federal-to-state cascading amendments — where a federal amendment changes federal numbers that then change Texas numbers — will become routine under current-year conformity, and Reedcorp’s compliance workflow now flags every federal amendment for Texas franchise tax filing impact assessment.
Can NYC residents and out-of-state preparers handle Texas franchise tax filing, or do you need a Texas CPA?Texas franchise tax filing does not legally require a Texas-licensed CPA. The Comptroller accepts filings from any preparer with the entity’s authorization, whether that preparer is a Texas CPA, an out-of-state CPA, an enrolled agent, or an unlicensed bookkeeper. The Webfile system processes electronic filings based on the entity’s 11-digit taxpayer number and the entity’s authorization, not on the preparer’s credentials. NYC-based Reedcorp clients with Texas entities are routinely filing Texas franchise tax filings through us, and we are not Texas-licensed. The Texas franchise tax filing rules are a creature of state law that any competent multistate tax preparer can learn and apply, much as a Texas CPA could learn New York City Unincorporated Business Tax with study.
That said, Texas franchise tax filing has enough state-specific quirks that an out-of-state generalist preparer with limited Texas exposure can miss material issues. The four-method margin calculation is unique to Texas. The annualization rule for short periods is unique to Texas. The COGS definition for Texas franchise tax purposes is different from federal COGS and from the COGS definitions used in California, New York, or any other state. The compensation deduction cap of $400,000 per employee is unique. The forfeiture procedure for missed filings and the cure requirements are unique. The Public Information Report is unique. A preparer who handles 200 New York and federal returns per year and one Texas return as a courtesy to a client may not be steeped enough in Texas franchise tax law to catch the 2026 IRC conformity change or the broadcaster COGS deduction without specific prompting.
For Reedcorp clients, the question is rarely “do I need a Texas CPA” — it’s “do I need a multistate tax preparer who actively keeps up with Texas franchise tax filing changes.” We do, because half our client base has Texas exposure of one kind or another. The most common Reedcorp Texas franchise tax filing scenario is an NYC-based real estate operator or fund manager with one to five Texas LLCs holding rental properties or partnership interests, where the federal and New York returns are the main event and Texas franchise tax filing is the secondary state filing. For that profile, the right approach is to do the four-method calculation, file Form 05-163 for any entity under the threshold (which is most of them) and Form 05-158 for any entity over, file the PIR, and reconcile the result against federal numbers. Total time per Texas franchise tax filing is usually 30 to 90 minutes when everything is clean.
The case for engaging a Texas-resident CPA specifically arises in two situations. First, for Texas franchise tax filings with audit exposure — a previously unfiled entity coming out of forfeiture, an economic nexus argument that the Comptroller is contesting, or a method-of-calculation issue under audit — a Texas-licensed CPA who handles regular Comptroller correspondence may have an advantage in working the audit. Second, for entities with primary operations in Texas where Texas franchise tax filing is the main event rather than a secondary issue — a Texas-based manufacturing company, a Texas-headquartered consulting firm with multistate fringe — a Texas CPA may be more efficient and may catch industry-specific issues a generalist would miss. For NYC-based clients with Texas as a peripheral exposure, the multistate preparer model works well. We handle Texas franchise tax filing as part of an integrated compliance package alongside federal, New York State, New York City, and any other state filings the client needs. The 2026 changes — the threshold update, the IRC conformity shift, and the broadcaster COGS provision — are the kind of details a multistate practice tracks routinely. The Texas franchise tax filing experience for an NYC client should be invisible: the entity stays in good standing, the report files on time, the tax is minimized within the legal calculation methods, and the Reedcorp federal return ties out cleanly with the Texas return.