Annual Maintenance for a Texas LLC

There are various tasks that a Texas LLC must perform annually. Failing to complete these tasks (i.e., the annual maintenance) can result in serious consequences.

ANNUAL REPORT

Perhaps the most important annual task is the filing of the annual report because failing to file the annual report will result in the forfeiture of the LLC.

Annual Report Due Date

Every Texas LLC is required to file an annual report with the Texas Comptroller no later than May 15th each year. The LLC’s first annual report, however, is not due until the year after formation (i.e., the initial annual report for an LLC formed on January 1, 2023 would be due on May 15, 2024).

What is an Annual Report?

The term “annual report” actually refers to two reports (typically filed together) that are filed annually with the Texas Comptroller of Public Accounts:

The public information report (PIR): The PIR is used to provide updated information about the LLC to the state (i.e., the names and addresses of the LLC's officers, directors, managers, or members, as applicable).
The franchise tax report: The franchise tax report is used to report total revenue to the Comptroller for franchise tax purposes. If the LLC had revenues during the prior calendar year that exceeded the franchise tax threshold ($1.23MM for 2022), the LLC may need to pay franchise taxes to the Texas Comptroller. If the LLC is under this franchise tax threshold, you simply file a “no tax due” franchise tax report.

Annual Report Filing Fee

The annual report is mandatory, but there is no filing fee for a timely filed annual report. If, however, the annual report is received after May 15th, the Comptroller will charge a late fee of $50.

Ramifications for Not Filing the Annual Report

If the annual report is not filed, the state will eventually cause the LLC to be involuntarily forfeited/terminated. For this reason, the annual report is often viewed as a renewal filing.

Where to File the Annual Report?

The annual report should be filed online through the Comptroller’s webfile system. You will need the LLC’s webfile number to access this system. See how to locate the webfile number.

The annual report is a state requirement, and therefore you will use the LLC’s 11-digit STATE tax ID (not the federal tax ID aka EIN). See how to locate the state tax ID for a Texas LLC.

SALES TAX REPORTING

If the LLC sells taxable goods or taxable services, it will need to (1) apply for a Texas sales tax permit; (2) collect sales tax from its customers; and (3) remit the collected taxes to the state either monthly, quarterly, or annually. Sales taxes can be reported and paid via the Texas Comptroller’s webfile system.

EMPLOYMENT TAX REPORTING

If the LLC has W-2 employees, then the LLC will need to file quarterly and annual reports with both the Texas Workforce Commission and the Internal Revenue Service. It is important to note that employment taxes are not paid/reported for non-employees (i.e., payments to 1099 contractors or distributions to owners).

FEDERAL INCOME TAX REPORTING

An LLC must report its profits or losses annually to the IRS. The manner in which the LLC must report and the due date of the report (aka return) depend on how the LLC is taxed. A single-member LLC reports profits on the LLC’s owner’s return, while a multi-member LLC files a partnership return no later than March 15 each year. See how an LLC is taxed for more details.

ANNUAL MEETINGS

Texas LLCs are no longer required to hold an annual meeting, but they are still recommended. Learn more about annual meetings for a Texas LLC.

Zachary Copp, Esq.

Attorney at Copp Law Firm, PC

Mr. Copp is a graduate of the University of Texas at Austin and the founder of the Copp Law Firm. He has been licensed in Texas for 19 years and has personally formed over 3,000 Texas LLCs since 2015. He was recognized as a Rising Star by SuperLawyers® for seven straight years. See full bio →