| (a) Effective date. Except as otherwise provided, the
provisions of this section apply to franchise tax reports originally
due on or after January 1, 2008.
(b) Taxable and nontaxable entities. See §3.581
of this title (relating to Margin: Taxable and Nontaxable Entities)
for a list of taxable and nontaxable entities.
(c) Extension of due date to November 15. Except for
a taxable entity that has been notified by the comptroller that it
is required to make its franchise tax payments by electronic funds
transfer (see subsections (d), (f), and (g) of this section), a taxable
entity will be granted an extension to file an annual report and the
due date of the report is extended to the next November 15, if the
taxable entity:
(1) requests the extension on or before May 15;
(2) requests the extension on a form provided by the
comptroller; and
(3) remits with the extension request:
(A) 90% or more of the amount of tax reported as due
on the report filed on or before November 15; or
(B) 100% of the tax reported as due for the previous
calendar year on the report due in the previous calendar year and
filed on or before May 14 of the year for which the extension is requested.
(i) For reports originally due prior to January 1,
2017, a combined group may only use this 100% option if the combined
group has lost a member or if the members of the combined group are
the same as they were on the last day of the period upon which the
report due in the previous calendar year was based.
(ii) For reports originally due on or after January
1, 2017, a combined group may use this 100% option regardless of any
changes in combined group members.
(iii) A separate entity that was included in a combined
group report originally due in the previous calendar year may not
use the 100% extension option.
(d) No previous report. An extension shall not be granted
under subsection (c)(3)(B) or (f)(3)(B) of this section, if no report
was due in the previous calendar year or the report due in the previous
calendar year is not filed on or before May 14 of the year for which
the extension is requested.
(e) Penalty and interest for taxable entities not required
to pay by electronic funds transfer. Penalty and interest, except
for a taxable entity that has been notified by the comptroller that
it is required to make its franchise tax payments by electronic funds
transfer (see subsection (h) of this section), will be calculated
in the following manner.
(1) If a taxable entity is granted an extension by
remitting, on or before May 15, at least 100% of the tax reported
as due for the previous calendar year on the report due in the previous
calendar year and filed on or before May 14 of the year for which
the extension is requested, then no penalty or interest will be assessed
if the remaining tax due is remitted on or before November 15.
(2) If a taxable entity is granted an extension by
remitting, on or before May 15, 90% or more of the tax that will be
reported as due on or before November 15, then no penalty or interest
will be assessed if the remaining tax due is remitted on or before
November 15.
(3) If a taxable entity, on or before May 15, requests
an extension but does not meet the requirements of paragraph (1) or
(2) of this subsection, then penalty and interest will be assessed
on the difference between 90% of the tax finally determined to be
due and the amount remitted on or before May 15. Penalty and interest
will also be assessed on 10% of the tax finally determined to be due
if not remitted on or before November 15.
(f) Required electronic funds transfer extension of
the due date to August 15. Subject to paragraphs (1) - (3) of this
subsection, a taxable entity that has been notified by the comptroller
that it is required to make its franchise tax payments by electronic
funds transfer (see §3.9 of this title (relating to Electronic
Filing of Returns and Reports; Electronic Transfer of Certain Payments
by Certain Taxpayers)) will be granted an extension to file an annual
report and the due date of the report is extended to the next August
15. A combined group is required to make its franchise tax payments
by electronic funds transfer if any member of the combined group receives
notice of the requirement. An extension of the due date to August
15 will be granted if the taxable entity:
(1) requests the extension on or before May 15;
(2) requests the extension on a form provided by the
comptroller; and
(3) remits with the extension request:
(A) 90% or more of the amount of tax reported as due
on the report filed on or before August 15; or
(B) 100% of the tax reported as due for the previous
calendar year on the report due in the previous calendar year and
filed on or before May 14 of the year for which the extension is requested.
(i) For reports originally due prior to January 1,
2017, a combined group may only use this 100% option if the combined
has lost a member or if the members of the combined group are the
same as they were on the last day of the period upon which the report
due in the previous calendar year was based.
(ii) For reports originally due on or after January
1, 2017, a combined group may use this 100% option regardless of any
changes in combined group members.
(iii) A separate entity that was included in a combined
group report originally due in the previous calendar year may not
use the 100% extension option.
(g) Required electronic funds transfer second extension
of the due date to November 15. A taxable entity granted an extension
under subsection (f) of this section will be granted an extension
to file an annual report and the due date of the report is extended
to the next November 15 if the taxable entity:
(1) requests the extension on or before August 15;
(2) requests the extension on a form provided by the
comptroller; and
(3) remits with the request the difference between
the amount paid previously for the current reporting period and 100%
of the amount of tax reported as due on the report filed on or before
November 15.
(h) Penalty and interest for taxable entities required
to pay by electronic funds transfer. Penalty and interest will be
calculated in the following manner.
(1) If a taxable entity is granted an extension until
August 15 by remitting, on or before May 15, at least 100% of the
tax reported as due for the previous calendar year on the report due
in the previous calendar year and filed on or before May 14 of the
year for which the extension is requested, then no penalty or interest
will be assessed if the remaining tax due is remitted on or before
August 15. However, if the taxable entity requests, on or before August
15, an extension until November 15, and remits, on or before August
15, at least 99% of the amount reported as due on or before November
15, then no penalty will be assessed. Interest will be assessed on
the remaining tax due if not remitted on or before November 15.
(2) If a taxable entity is granted an extension until
August 15 by remitting, on or before May 15, 90% or more of the tax
that will be reported as due on or before August 15, then no penalty
or interest will be assessed if the remaining tax due is remitted
on or before August 15. However, if the taxable entity requests, on
or before August 15, an extension until November 15, and remits, on
or before August 15, at least 99% of the amount reported as due on
or before November 15, then no penalty will be assessed. Interest
will be assessed on the remaining tax due if not remitted on or before
November 15.
(3) If a taxable entity, on or before May 15, requests
an extension until August 15, but does not meet the requirements of
paragraph (1) or (2) of this subsection, then penalty and interest
will be assessed on the difference between 90% of the tax finally
determined to be due and the amount remitted on or before May 15.
Penalty and interest will also be assessed on 10% of the tax finally
determined to be due if not remitted on or before August 15. However,
if the taxable entity requests, on or before August 15, an extension
until November 15, and remits on or before August 15 at least 99%
of the amount reported as due on or before November 15, then penalty
and interest will be assessed on the difference between 90% of the
tax finally determined to be due and the amount remitted on or before
May 15. No penalty will be assessed on the remaining tax due if remitted
on or before November 15. Interest will be assessed on the remaining
tax due if not remitted on or before November 15.
(i) No additional extensions. No additional extensions
will be granted for annual franchise tax reports pursuant to Tax Code,
§111.057.
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