Texas Franchise Tax EZ Computation Report – Simplified Franchise Tax Filing for 2026
Last reviewed: 2025-11-03
Use the Texas Tax Form Calculator Form 05-102: Texas Franchise Tax EZ Computation Report (2026) 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 EZ Computation Report provides a streamlined option for qualifying entities to satisfy franchise tax obligations without the complexity of the long form (Form 05-158). Designed for businesses with total revenue at or below $20,000,000, this simplified method applies a flat 0.331% rate to apportioned total revenue. Entities under the $2,470,000 no-tax-due threshold are exempt from payment but may still have filing duties.
The EZ Computation excludes deductions for cost of goods sold or compensation and disallows all credits. It remains one of the most efficient filing routes for small to mid-sized Texas entities seeking minimal compliance burden while maintaining full adherence to franchise tax requirements.
Who Must File
- Taxable entities organized or doing business in Texas with total annual revenue ≤ $20,000,000.
- Revenue exceeding $2,470,000 requires filing, even if resulting tax is below $1,000.
- Entities exceeding $20,000,000 must use the Long Form 05-158.
- No credits, loss carryforwards, or margin deductions permitted.
- Combined groups may use EZ only if aggregate total revenue for the group is within the same limit.
Key Definitions
- Total Revenue: gross receipts as defined under Texas Tax Code §171.1011.
- Apportionment Factor: Texas gross receipts ÷ everywhere gross receipts.
- EZ Rate: 0.331% applied to apportioned total revenue.
- No Tax Due Threshold: $2,470,000 for 2026.
| 1 | Total revenue (worldwide) | |
| 2 | Everywhere gross receipts | |
| 3 | Texas gross receipts | |
| 4 | Apportionment factor (Line 3 ÷ Line 2) | % |
| 5 | Apportioned total revenue (Line 1 × Line 4) | $ |
| 6 | EZ rate | |
| 7 | Tax (pre-checks) (Line 5 × Line 6) | $ |
| 8 | No tax due threshold check (Line 1 ≤ $2,470,000) | |
| 9 | $1,000 rule check (if Line 7 < $1,000, tax = $0) | |
| 10 | Tax due | $ |
Detailed Analysis
Form 05-102 (EZ Computation Report) simplifies the franchise tax calculation to a single margin measure — apportioned total revenue. Apportionment is computed by dividing Texas gross receipts (Line 3) by everywhere gross receipts (Line 2) to arrive at the percentage (Line 4). That percentage is then multiplied by total revenue (Line 1) to determine apportioned revenue (Line 5).
The EZ rate of 0.331% applies uniformly to that amount (Line 6). Entities must ensure that the reported revenue does not exceed $20,000,000 to remain eligible for EZ filing.
While the EZ form does not allow deductions for cost of goods sold or compensation, the simplicity is valuable for service-based businesses and start-ups with low deductible expenses. Taxpayers seeking to reduce liability via deductions should evaluate filing under the long form instead.
The $2,470,000 no-tax-due threshold functions as an absolute exemption limit: if total revenue is below that figure, no tax is owed and only a public information report may be required. However, filers with computed tax under $1,000 should also report $0 due, per Texas Comptroller policy.
For entities with multi-state operations, the apportionment ratio must reflect all gross receipts subject to Texas franchise tax rules under 34 TAC §3.591. Accurate classification of receipts is critical to avoid audit adjustments or penalties.
Refer to Texas Comptroller publication 98-806 and the Franchise Tax EZ Computation Report Instructions for guidance on reporting multi-tier ownership and combined groups.
Last reviewed: 2025-11-03: If you believe this form requires an update, please contact us.
Planning Insights and Compliance Tips
Although EZ filing limits deduction options, it significantly reduces administrative overhead. Small entities benefit from predictable liability and simplified documentation. Where revenue fluctuates around $20,000,000, management should evaluate both EZ and long-form calculations to identify potential savings.
Maintaining accurate sales records for Texas and out-of-state transactions is essential for correct apportionment. Errors in Line 4 can result in material misstatements of tax due. Periodic internal reconciliations using state sales data are recommended prior to filing.
Audit focus areas include apportionment accuracy and entity eligibility under the EZ cap. Document how total revenue was determined under Texas Tax Code §171.1011 to withstand review. Using the calculator ensures consistency and reduces risk of late-payment interest or penalty assessment.
Quick Access Tools
Frequently Asked Questions
What about unemployment taxes in Texas?
Employers pay state unemployment tax (SUTA), but it doesn’t affect employee paychecks.
How does the absence of income tax affect retirees in Texas?
Retirees benefit since pensions, IRAs, and Social Security are untaxed at the state level.
What is the Texas franchise tax rate?
For 2025, typically 0.375% for retail/wholesale and 0.75% for other businesses over $2.47 million in revenue.
Does Texas tax Social Security benefits?
No. Social Security benefits are only federally taxable, if at all.
Where can I find local Texas tax rates?
See the Texas Tax Calculator or your local county website for property and sales rates.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.