Texas owners. The same card still has two lives.

Outside Dallas, we are all Texans.

The call that starts in Dallas is the call we keep for an owner in Houston, an owner in Austin, an owner in Fort Worth, an owner in the Panhandle, an owner on the Gulf coast, and an owner in the Hill Country. We are all Texans. None of those owners is handed a chair in town, and the camera stays on the mixed card.

A rodeo night, Friday night lights, bluebonnets along a shoulder, a grocery run at H-E-B, and a stop at Buc-ee's can all stay where they are, because none of them tells us which life a charge belongs to. The card does that sorting, Texas then adds its own reports as a second pile beside the federal return, and nobody is asked to drive in for the conversation.

Living in one of those places does not move a household line onto the shop or a shop line onto the household. What the owner took still sits in equity, profit still has to be the shop alone, and the state report is a second reading of that same year rather than a place to tuck a grocery receipt.

The card is split before any state report.

A charge stays with the shop only when the receipt names what was bought, who it was for, and which year owns it, and sending the franchise report to the Comptroller does not loosen that test. On the day that report goes out, a household bill is still a household bill.

The receipt has to fit a federal return before any state figure is copied off the feed. A disregarded company does not grow a federal return of its own, because its year already sits inside the return the owner files, and that is the return we open first. Partnership activity goes on Form 1065, S corporation activity goes on Form 1120-S, C corporation activity goes on Form 1120, and none of those is retired by the Texas report.

Spending by the owner still leaves profit and lands in equity, and moving personal cash across is still not a sale. If either mistake is sitting in the feed, the revenue figure copied onto the state report is the wrong figure, because it was taken from a blend of the two lives on one card.

Four margin counts, after the card is already split.

Once the card is split, the shop revenue is what we carry into the franchise tax, the yearly price Texas puts on the privilege of doing business. Reports that cover 2026 and 2027 let the company count margin four ways and then keep the way that fits that year.

All four counts begin at total revenue. From there the company may keep seventy percent and stop, with nothing else removed, or subtract only the cost of goods sold, or subtract compensation and let the rate land on what remains, or subtract a flat one million dollars.

On an ordinary trade the goods subtraction is what the company spent to acquire the tangible things it sells or to produce them, and real property sold in that same trade is counted the same way. Where the shop sells services and no goods, that subtraction is often empty, and we do not invent a goods figure to fill it while the card is open. Industry exceptions live in the statute, and we will not invent one while we are labeling the card.

Inside the compensation subtraction, contract labor that went out on a 1099 stays out, and so do the payroll taxes the company pays because it is the employer. Across the reports for 2026 and for 2027, no one person can contribute more than four hundred eighty thousand dollars toward that compensation figure, though health care, retirement, and workers compensation are allowed to remain inside the cap.

A combined group is held to one margin method for every member. Publication 98-806 is where an S corporation is set down with a limited liability company for this report, which means a federal form does not by itself end the Texas filing. The shop pile and the household pile are already apart before any of those four counts begins.

When the tax itself drops away.

On the reports that cover 2026 and 2027, revenue at or under two million six hundred fifty thousand dollars means the company owes no franchise tax and files no franchise tax report, yet the information papers can remain and a company under that line is not finished for the year.

Even a zero tax bill can still carry two forms, public information on Form 05-102 and ownership information on Form 05-167, and both fall away only after the Comptroller has already parked the company on the skip list.

The skip list is the short set the Comptroller has already excused, and it covers exempt companies, companies with neither a Texas charter nor nexus, passive companies, and a qualifying new veteran-owned business during the opening five years. A change of officers waits for the next information report, because that change does not earn a form of its own in the months between reports.

Form 05-102 can be signed by an officer, by a director, or by a person the company has already given signing authority. A new registered agent is filed with the Secretary of State under the instructions that office publishes, because Form 05-102 carries no blank where the agent would be changed, and the mixed card is not where that update is made.

Rates and the May mark, read against the shop pile.

Reports covering 2026 and 2027 charge retail activity and wholesale activity at 0.375 percent and charge every other activity at 0.75 percent. EZ is a narrower door that is tested only after total revenue has been annualized, and the door shuts once that annualized figure climbs past twenty million dollars. At or under the figure the EZ rate is 0.331 percent, and choosing EZ for the year means the margin subtractions are given up.

We open the long franchise report when revenue has cleared the no-tax line and EZ stays unused, or when the year takes a margin subtraction and has to show the subtraction. The report is aimed at the fifteenth of May, and we shift that aim only when the calendar has already shifted the day.

An extension is a payment choice. Holding it means paying 100 percent of the prior-year tax or 90 percent of the tax computed on this report, and a company sending its first report has no prior year to lean on. Where the electronic-transfer rule does not apply, more time is asked through Webfile or on Form 05-164, which moves the due day out to November 15.

When the prior fiscal year showed ten thousand dollars or more, payment goes by electronic funds transfer. We do not print a second clock that would freeze an August day beside the card. After Texas nexus ends, the final report has 60 days to arrive, and we still read that report against the split card rather than against a blended feed.

A late franchise report draws a one-time penalty of fifty dollars on that report, tax that arrives from 1 to 30 days late picks up 5 percent, the 10 percent figure appears only after the unpaid tax has sat for thirty days, and interest is allowed to begin on day 61 while the rate stays on the Comptroller schedule and is not frozen into a number here.

The research and development credit changed in January 2026, and we point at the franchise home page for it rather than restating the credit beside the card. Forfeiture, as written, can take the right to sue and the right to defend and can place personal liability on certain debts, and it stops short of financial institutions. A series wall starts at Business Organizations Code section 101.601 and the sections after it, a lawyer reads that wall, and a receipt cannot buy the wall as a shop cost.

Sales tax is a different pile.

The state sales-tax rate is 6.25 percent, a city or a county or a transit district can add local tax up to a ceiling of 2 percent, and on one sale those rates together cannot pass 8.25 percent. The add-on that belongs to one named city stays off this page, because the owner looks the address up on the day of the sale while the card is being sorted.

If the sales-tax due day lands on a Saturday, a Sunday, or a legal holiday, the filing waits for the next day the offices are open, and that wait does not move the work of labeling the card. A quarterly permit lands in April, July, October, and January, a monthly sales report comes due on the 20th, and a report filed only once in the year comes due on January 20.

Getting the sales report in by its due day earns a timely discount of 0.5 percent, and paying ahead of that day can add a further 1.25 percent. A report that misses its day costs fifty dollars, and the tax itself then picks up 5 percent during the first thirty days and 10 percent after that, the same step the franchise tax uses, which is a penalty on the state's money rather than a label on the card.

The seller keeps Form 01-339 for four years with the other resale papers, a permit number written on the register does not stand in for the resale certificate, a purchase that mixes resale goods with shop goods has to mark which items were bought to resell, and moving a resale item into shop use makes the skipped tax due at that moment.

Sales tax the company collected belongs to the state, so it fails the receipt test, because a shop cost has to be a cost of the work. When the company paid sales tax on something the shop bought, that tax rides with the purchase, and the receipt test still decides whether the whole purchase leaves the household pile or remains with the shop.

An S election leaves the grocery line where the card put it.

Form 2553 can leave any time in the year before the tax year opens, or during the two months and fifteen days after the tax year opens, and a year that starts on January 1 makes March 15 the due day. The worked example the IRS prints starts that year on the seventh of January and puts the election day on the twenty-first of March, which is why we do not hand every owner the middle of March as a shared mark.

Mailing Form 2553 leaves Form 05-102 unsent, and a grocery run for the household stays off the shop after the election in the same way it stayed off before anyone elected. Before any non-wage distribution is taken we settle reasonable compensation, we expect the IRS may reclassify an amount that wore another name, and the wage we are willing to discuss will not sit above what the owner actually received.

Payday papers, and a notice that is not a shop cost.

Inside 20 calendar days a new hire and a rehire are reported to the Texas Attorney General Child Support Division, the quarterly wage report cannot stand in for that notice, Form 941 stays the quarterly federal payroll report, Form 940 stays the employer federal unemployment return, and the unemployment tax stays out of the worker's pay while the card is being labeled.

We deposit the quarter's federal unemployment tax once that quarter climbs past five hundred dollars, we follow Publication 583 and keep the papers at least four years, and we keep the name trust-fund tax in the conversation without printing a percent for it on this page.

When an examination is called, the owner is the person who attends, and a notice that points at one line sends us back to the closed month that already agreed with the bank rather than into a fresh blend of the card. Money that moved into a personal account is left off Form 940, the wage line leaves that same money out, and the notice does not become a deduction merely because it arrived on state letterhead, since sorting the card is still the job.