Even in states without a traditional income tax, businesses must meet annual compliance requirements to maintain good standing. Texas and Florida are often touted for their business‑friendly tax climates—but what happens if you miss your franchise tax report or annual report deadline? In this blog, we’ll dive into the specific penalties and interest rules in each state, outline the deadlines you need to know, and share strategies to avoid costly fees.
📅 Key Annual Filing Requirements
Both Texas and Florida require most business entities to file an annual report or tax return—even if no tax is due. These filings keep your entity active in the state’s records and ensure you remain eligible for limited liability and other legal protections.
- Texas: Franchise Tax Report and Public Information Report—due May 15 each year.
- Florida: Annual Report for corporations and LLCs—due May 1 each year.
⚖️ Texas Franchise Tax Penalties
In Texas, failing to file your franchise tax report by May 15 triggers:
- 5% penalty of the tax due if filed 1–30 days late.
- 10% penalty if filed 31–60 days late.
- 5% additional penalty for each subsequent 30‑day period, up to a maximum of 30% total.
- Interest accrues on unpaid tax at the state’s interest rate (currently 4.25%) compounded annually.
- No‑tax‑due filers still incur a minimum $50 report fee and a late penalty of $50 if filed after May 15.
📋 Texas Public Information Report Penalties
The Public Information Report is bundled with the franchise report; missing either triggers the same penalties. Additionally, delinquent filings can lead to:
- Suspension of your right to transact business in Texas
- Loss of limited liability protection
- Administrative dissolution if not cured within 120 days of notice
⚖️ Florida Annual Report Penalties
Florida’s annual report, due May 1, is required for all corporations and limited liability companies. Late filings incur:
- $400 late fee for reports filed June 1–September 1.
- Administrative dissolution if the report is not filed by September 1.
- No additional interest, but reinstatement after dissolution requires a separate application fee and payment of all back reports.
📊 At‑a‑Glance Comparison
| State | Filing Due | Penalties for Late Filing | Maximum Penalty | Consequences |
|---|---|---|---|---|
| Texas | May 15 | 5% (1–30 days), 10% (31–60 days), +5% each further 30 days | 30% of tax due (min. $50 if no tax) | Suspension; potential dissolution |
| Florida | May 1 | $400 flat fee (June 1–Sept 1) | $400 per year | Administrative dissolution |
💡 Avoiding Late‑Filing Penalties
- Automate reminders: Calendar alerts for 60, 30, and 7 days before due date.
- Use electronic filing: Both states accept online submissions that timestamp your compliance.
- Budget for minimal fees: Even if no tax is due, set aside $50 (TX) or $400 (FL) to cover potential report fees.
- Monitor entity status: Check the Texas SOS and Florida Division of Corporations websites to confirm your good standing.
✅ Final Thoughts
While Texas and Florida offer pro‑business tax climates, missing your franchise tax or annual report deadline can carry steep, state‑specific penalties. Knowing the deadlines, penalty structures, and potential legal consequences helps you plan ahead and stay in good standing. Implementing simple reminders and budgeting for filing fees will prevent unexpected costs and protect your limited liability status.
