Do I need to file a franchise tax report for my LLC?

[John Morgan]

I formed an LLC in Texas for my 6 rental properties last year. A letter from the Texas Comptroller of Public Accounts says my company's first franchise tax report is due in May. What is this and do I need to file it for my LLC? Are there any other annual fees with having an LLC? I'm new to this obviously so thank you for any info!

Also, one of my properties is a vacation nightly rental in Missouri. Do I need to file anything with MO for my one property there..like a foreign entity or any other annual permit? My attorney says I don't. Only if it generates a lot of money..like over a million. And he says I don't need to pay any annual fees or permit for my Texas LLC. He said once he set it up for me, we're good to go and nothing further needs to ever be done with keeping it registered. Just wanted to double check since he's not a CPA.

[Clifford Paul]

Ongoing Texas LLC Requirements

Forming your LLC is just the beginning. You must also take steps to maintain the business and keep it in compliance with the state.

For starters, you must file a franchise tax and public information report with the Comptroller's office. This report is due between January 1 and May 15 and must list the names and contact information of your managers, officers, and directors. The required fee is calculated according to a taxable margin, but the average cost is about $101.

Most states refer to this fee as an Annual Report, but its other names include:

• Annual List of Members
• Annual Certificate
• Biennial Report
• Annual Registration Fee
• Biennial Statement
• Periodic Report
• Decennial Report
• Business Privilege Tax Return
• Franchise Tax Report

Failing to pay your annual LLC fees can result in your business being dissolved. When you calculate all required fees and formation costs, you can spend anywhere from $1,000 to $3,000 on your business. Aside from the franchise tax, however, Texas imposes no additional annual fees on LLC