On January 18, 2008, the Comptroller of Public Accounts of the State of Texas (the “Comptroller”) announced a revised due date for initial Texas franchise tax reports originally due from January 1, 2008 through April 30, 2008. The revised due date for all such returns is now May 1, 2008.
It is important to note that the original due date of the initial report will be used to determine the accounting period on which the report will be based. The accounting period end date must be at least 60 days before the due date. The Comptroller provides the following example on her website:
Assume a corporation formed on October 20, 2006 has an initial report originally due on January 17, 2008. The due date for this initial report has been changed to May 1, 2008. If the corporation has a December 31st accounting year end, the corporation uses December 31, 2006 as the ending date for the report, as December 31, 2007 is not 60 days before the original due date of January 17, 2008.
Observation
This announcement will not apply to combined group filings. Under the revised franchise tax, taxable entities that are part of an affiliated group engaged in a unitary business must file a combined group report. A newly created taxable entity that is a member of a combined group is not required to report on a separate initial report, and a combined group that would not otherwise be required to file an initial report will not be required to file an initial report solely because a newly created entity has become a member of the combined group. As a result, this announcement will apply only to tax entities that are stand-alone and are not included in any combined group filing. 34 Tex. Admin. Code § 3.584(c)(1)(H) (2007) (Comptroller, Margin: Reports and Payments).