The word is the state's, not yours. California, Texas, Delaware and a long list of others charge a franchise tax for the privilege of doing business there as an entity, each on its own form and its own calendar. Twenty minutes tells you which state reports your entity owes, what is late, and what is still fixable this year.
You searched for franchise tax help because something with your entity's name on it landed on you and nobody you pay had ever mentioned this tax existed. Here is the plain answer. A state franchise tax is what a state charges for the privilege of doing business inside its borders as a registered entity, so your LLC or corporation is the franchise the word refers to, and owning an actual franchise has nothing to do with it. It is also not a Texas invention. Texas, Delaware, California, Tennessee, Arkansas, Louisiana, Oklahoma and other states each run their own version, under their own name, computed on their own base, filed on their own forms, due on their own calendar. Texas reports are due in mid May and every other state keeps its own date, which is why the first question here is always which state, which entity, which year. Send the notice and last year's return and Steven Palmieri reads both, then tells you which state reports your entity actually owes, which years are sitting open behind you, what a plan would have changed, and what is still open for this one. Twenty minutes, no charge, and the planning is carried in the monthly work here rather than sold to you as a $15,000 project.
The letter is the symptom, and the cause was decided months earlier by whoever prepared your return. Here is where it usually goes wrong.
The federal return has a deadline your preparer answers to, and the state side of your entity sends him nothing at all. So the franchise tax report, the annual filing that rides along with it in some states, and the registration behind both sat outside the work he priced. None of that has to be dishonest to cost you. It only has to be unassigned, which is how owners end up reading about their own entity in a letter. Twenty minutes puts a person on the state calendar.
Owners assume a thin year means nothing is owed, and in several states that is not how the base works, because a franchise tax can be computed on margin, on gross receipts, on capital, or as a flat minimum for simply being registered. That is how a bill arrives in the year you could least explain it. We read how your state computes yours before anyone says a number out loud. Bring the notice and you will leave the call knowing where it came from.
Let enough reports go by and the tone of the mail changes, with penalties and interest, and in some states a forfeiture of your entity's right to transact business, which is how an owner discovers the cheap preparer was never watching this side. Lenders, renewals and buyers all check good standing. Nobody honest will promise you a waiver or a reinstatement before reading your file, and we will not either. What twenty minutes gives you is exactly where you stand this week.
Because the state is charging for the privilege of doing business there as a registered entity, and it picked a word that has been confusing owners ever since. The franchise in question is your LLC or your corporation. That is also why a notice can turn up in a year you barely made anything. Bring the letter to the call and we will tell you which report it belongs to and which year it is reaching back for.
No. Texas is simply the version most owners have heard of, while California runs its own on both LLCs and corporations, and a long list of other states charge something equivalent under a different name, on a different base, with their own forms and their own due date. Texas reports are due in mid May. Delaware runs its own version, where a corporation's annual report and franchise tax come due in early spring rather than in May. If your entity is registered in more than one state you may owe in more than one, and twenty minutes is how you find that out before a second letter does it for you.
It is the Texas form, numbered 05-102, that puts on record who stands behind your entity, meaning the officers, directors or managers the state has for you. Every corporation, LLC, limited partnership, professional association and financial institution organized in Texas or with nexus there files one every year, and it carries the same due date as the annual franchise tax report, which falls in mid May. Owing nothing does not release you from it either, because an entity at or below the no tax due threshold still files the Public Information Report or the Ownership Information Report. Changing your registered agent is the one thing that does not go on this form, as that belongs to the Secretary of State. Bring your last one to the call and we will tell you whether it was filed and what it now says about you.
Yes, and that is the part owners find hardest to believe. California treats it as an annual minimum owed for being there at all. An LLC organized in California or doing business there owes the annual tax even in a year it conducts no business, right up until the LLC is formally canceled, and a corporation incorporated, registered or doing business there owes a minimum franchise tax, with a narrow exception for a newly incorporated corporation in its first taxable year. A thin year does not make any of that disappear. If your entity is registered in California and somebody told you a quiet year means nothing is due, bring that return to the call.
First you find out what the state's own record says about your entity, because late, never filed and forfeited are three different positions with three different routes back. We read the state filings alongside last year's return and tell you which one you are actually in and what the realistic path looks like from there. We will not promise you waived penalties or an automatic reinstatement, and you should distrust anyone who does before reading the file.
Preparing a federal return and running an entity's state obligations are two different jobs, and only the first one was on the invoice you paid. Most owners are introduced to the second job by a state envelope. The call is where that second job finally gets an owner, and where you hear what it would have changed had somebody been doing it last year.
Steven Palmieri and his team. The same people keep the monthly books, watch the state calendars, do the planning, and prepare and file the returns, so your entity is not handed to a stranger the week something is due. We do not perform audits, reviews or compilations of financial statements. If a lender needs audited statements, a licensed audit firm does that piece and we hand them clean books.