Texas Extends Franchise Tax Deadline

The COVID-19 pandemic continues to disrupt life for people and businesses nationwide. To provide Texas franchise taxpayers with much needed relief, the Texas Comptroller of Public Accounts is automatically extending the due date for 2020 Texas franchise tax reports to July 15, 2020 to maintain alignment with recent announcements made by the Internal Revenue Service (IRS).

The due date extension applies to all franchise taxpayers and is automatic, which means no additional forms need to be filed to take advantage of the extension.

Non-EFT Franchise Taxpayers

Non-electronic funds transfer (non-EFT) franchise taxpayers that cannot file by July 15 may file an extension request on or before July 15 and must pay 90 percent of the tax due for the current year, or 100 percent of the tax reported as due for the prior year with the extension request. Non-EFT franchise taxpayers who request an extension have until Jan. 15 to file their report and pay the remainder of the tax due.

If the extension request does not meet the payment requirements when the report is filed, penalty and interest will apply to any part of the 90 percent of the tax not paid by July 15 and to any part of the 10 percent of the tax not paid by January 15, 2021.

EFT Franchise Taxpayers

On or before July 15, franchise taxpayers that are mandatory EFT payers may request an extension of time to file to August 15 and must pay 90 percent of the tax due for the current year or 100 percent of the tax reported as due for the prior year with the extension request. On or before August 15, EFT franchise taxpayers may request a second extension of time to file their report and must pay the remainder of any tax due with their extension request. The August 15 extension request extends the report due date to January 15.

Any payments made after August 15 will be subject to penalty and interest.

Timely Requests Are Essential

The Comptroller’s office will grant an extension of time to file a franchise tax report upon receipt of a timely request. Timely means submitted or postmarked on or before the due date of the original report.

Generally, for an extension to be valid, 100 percent of the tax paid in the prior year, or 90 percent of the tax that will be due with the current year’s report, must be paid on or before the original due date of the report.

ATKG is committed to keeping you up to date with the latest changes during these challenging times. Though overwhelming, these changes pave the way for opportunistic tax planning. Please contact your ATKG advisor with any questions or concerns.

Annette Goodson is a Tax Director for ATKG. She serves as the lead of the firm’s State and Local Tax practice. She brings more than 25 years of public accounting experience to the team in the areas of federal tax, state tax and recruiting. Annette is a Certified Public Accountant and received her bachelor’s degree in accounting from The University of Texas at San Antonio

For further information on this topic or other tax questions please contact Annette Goodson or a member of our Tax practice at 210.733.6611 or agoodson@atkgcpa.com