The following article provides a spotlight on highlights from the Comptroller’s April 2026 edition of Tax Policy News:
Coastal Protection Fee
The Coastal Protection Fee will be suspended effective May 1, 2026. The General Land Office has certified that the Coastal Protection Fund has reached the maximum balance allowed. Crude oil transferred through a marine terminal on or after May 1 is not subject to this fee.
Franchise No Tax Due Threshold and Filing Requirements
The no-tax-due threshold has been updated to $2,650,000 for the 2026 franchise tax report. Additionally, the Office of the Comptroller of Public Accounts wants to remind entities that the No Tax Due Report was discontinued for 2024 and beyond.
For entities that previously filed a No Tax Due Report, the following reporting options are now available:
- Taxable entities whose annualized total revenue is less than or equal to the no tax due threshold do not owe any tax and are not required to file a franchise tax report. They are, however, required to file a Public Information Report (PIR) or Ownership Information Report (OIR).
- Qualifying new veteran-owned businesses are not required to file a franchise tax report for the initial five-year period that they qualify as a new veteran-owned business. For new veteran-owned businesses, no PIR or OIR is required during this initial five-year period.
- Qualifying passive entities must file either the long form or the EZ Computation form and darken the circle for passive entities in the taxpayer information section at the top of the form. Other than signing the report, passive entities need not provide information in any other section of the report and no PIR or OIR is required.
- Qualifying real estate investment trusts (REITs) must file either a long form or EZ Computation form and darken the appropriate circle in the taxpayer information section at the top of the form. Other than signing the report, REITs need not provide information in any other section of the report. REITs must file a PIR or OIR.
- Taxable entities with zero Texas gross receipts must file either a long form or EZ Computation form and complete specific line items on the form to compute the entity’s total revenue and report zero on the Texas gross receipts line. Entities with zero Texas gross receipts must file a PIR or OIR.
The long form, EZ Computation form, PIR, OIR and instructions for each tax year are available at Texas Franchise Tax Forms webpage.
Franchise Tax and IRC Conformity
Starting with the 2026 franchise tax report, taxable entities will be required to determine amounts taken from its federal tax return under the federal tax law in effect for that federal tax year, unless the Texas statute or rule specifically references the Internal Revenue Code (IRC). Where the statute or rule references the IRC, a taxable entity must compute such amounts under the 2007 IRC. This change applies to all components of the franchise tax.
