Discover how Texas franchise tax works. Even businesses that owe nothing may need to file. Learn more about the 2026 No Tax Due threshold, how taxable margin is calculated, which rate applies, and what penalties apply for missing the May 15 due date in this TurboTax guide. Learn More: turbotax.intuit.com/small-business-taxes 00:00 – What Is the Texas Franchise Tax? 00:19 – Which Businesses Must Pay vs. Exemptions 00:54 – No Tax Due Threshold (2026–2027) 01:20 – How to Calculate Texas Franchise Tax & Tax Rates 01:46 – The EZ Computation Method 02:05 – Federal Tax Deductions & Filing with TurboTax Texas Franchise Tax FAQ: What is the Texas franchise tax and who is subject to it? The Texas franchise tax is a state tax imposed on entities for the privilege of doing business in Texas, based on a business's taxable margin rather than net income. Who is exempt from paying the Texas franchise tax? Exempt entities generally include sole proprietorships, general partners...