The Covid-19 pandemic has caused widespread economic hardship and has had a detrimental and lasting impact on many businesses in Houston. This has made it even harder for some businesses to pay their franchise tax.

The Texas franchise tax is a privileged tax that is imposed on every taxable entity that was formed in Texas or conducts business in Texas.

If you are facing a Texas franchise tax audit, or the Texas Comptroller is pursuing you because you haven’t been able to keep on top of your taxes, then you will benefit from the help of a Houston tax lawyer. Tax audits can be complicated and time-consuming, but with our team of experienced and knowledgeable Texas tax lawyers on your side, you might be able to drastically reduce the amount you need to pay.

Ronald Arthur Stearns Sr. PLLC in Houston, TX

If you think you could benefit from legal representation, then you should hire Ronald Arthur Stearns Sr. PLLC in Houston, Texas. With a deep understanding of Texas tax law and many years of experience, you will be able to rest easy knowing that your case is in the best possible hands.

Over 26 years, Ronald A. Stearns Sr. has successfully represented clients just like you in a range of different tax cases, and has completely devoted his career to litigation and tax resolution. He has been awarded several honors and his professional associations include the American Bar Association and the State Bar of Texas.

His deep understanding of Texas law and courts, and tax issues, paired with his committed approach to the attorney-client relationship, means that retaining representation from Ronald A. Stearns Sr. will give you the best chance at a successful, stress-free case.

So if you need help with your franchise tax debt or audit, then contact our Houston, TX team at 210-853-2135.

Who Has to Pay the Franchise Tax in Houston, TX?

Businesses that have $1.18 million or more in annual receipts are required to pay the Texas franchise tax. This no-tax-due threshold applies to the years 2020 and 2021, but the threshold could change in the coming years.

The state’s franchise tax is calculated based on a company’s margin, and this calculation can be done in many ways.

Small businesses with receipts below the $1.18 million threshold don’t have to pay the franchise tax.

You have a franchise tax liability if you are one of the following entities and were formed in Texas or engage in business in Texas:

  • Corporations
  • S corporations
  • Professional corporations
  • Limited liability companies (LLCs)
  • Banks
  • State limited banking associations
  • Savings and loan associations
  • Trusts
  • Partnerships (general, limited, and unlimited liability)
  • Joint ventures
  • Professional associations
  • Business associations
  • Other legal entities

What Happens if You Don’t Pay Your Franchise Tax Debt?

If you have one of the business entities listed above, and your company earns $1.18 million revenue annually, and you fail to file your franchise tax returns or pay your franchise tax liability, then you will lose your limited liability protection.

If a company fails to file franchise tax returns, then the company may forfeit its corporate privileges. The Texas Tax Code will provide for personal liability for the management of the company when this happens. This is more likely to happen when a person or company owns multiple business entities.

You may also have to file for bankruptcy.

To prevent this from happening to you and your company, you should contact a tax attorney as soon as you receive notice of a tax audit.

However, errors are not uncommon when it comes to Franchise Tax Reports. If you believe you have wrongly received a franchise tax audit, then contact our law firm. Attorney Ronald A Stearns SR is more than prepared to assess your solution to find the perfect solution. Regardless of your specific situation, you should not navigate these matters alone.

What Penalties Do You Face if You Fail to Pay Your Tax Liabilities?

If you owe franchise tax but fail to pay, then you will be facing the following penalties:

  • A $50 penalty is considered on each report that is filed after the due date.
  • If tax is paid within 1-30 days after the due date, then a 5% penalty is assessed.
  • If tax is paid over 30 days after the due date, then a 10% penalty is assessed.
  • If the tax has not been paid within 60 days after the due date, then you will be charged interest beginning 61 days after the due date.

To avoid this, you should get in touch with a talented Houston tax attorney, as they will be able to guide you through the legal process and ensure you get the best result possible.

What Can You Do About It?

If you do owe the Texas Comptroller franchise tax, then you should try to pay it as soon as possible. However, before doing this, you should still speak to your tax lawyers. They may be able to prove that you were not eligible, or they may be able to reduce the amount you’re expected to pay, as well as any penalties or interest you may now be facing.

It’s even more important to contact a Houston tax attorney if you think you do not qualify to pay the franchise tax audit. As a taxpayer, you have the right to speak to a tax attorney about your situation and get advice.

It is very possible that a Comptroller auditor has made a mistake, and you don’t actually owe any money. If you are in any doubt, you shouldn’t hesitate to contact a Houston tax law firm, who, with your permission, will be able to go through your income, bank accounts, business transactions, and more to prove that you should not be facing a franchise tax audit.

How a Houston Tax Attorney Can Help You

Ronald Arthur Stearns Sr. PLLC will help you navigate through the legal process relating to your franchise tax defense. He will be able to assist you in compliance matters, communicate with the Texas Comptroller, amend any tax return, and file unfiled tax returns.

Your tax attorney will ensure they do everything they can to reduce your tax liability to the absolute minimum amount, considering your specific case. In order to do this, they will obtain records and evidence and use their wealth of knowledge and experience to assess what they can do for you.

They will analyze your case to work out what are the best options that are available to you and then determine what is the best course of action.

Your Houston tax attorney will then work tirelessly to reduce or eliminate any interest or penalties that may have been imposed on you and your tax debt, which will reduce the amount that you are expected to pay.

Based on the specific circumstances of your case, your attorney may even be able to argue that you are not entitled to this tax liability and could appeal it. They will also be ready to file and prosecute your case in tax court if you are treated unfairly.

It is important that you get in touch with Ronald A. Stearns as soon as possible as taxpayer rights usually have strict time constraints. The longer you delay getting in touch with us, the fewer options will be available to you.

Despite this, thanks to his many years of experience, there will usually be something he can do to help you.

Speak to a Houston Tax Lawyer Today

If you are experiencing problems relating to your franchise tax, or any other taxes, then you should contact Ronald A. Stearns Sr. immediately.

As a taxpayer, there are rights that protect you. Unfortunately, many of your options come with strict time restraints, so you can’t delay speaking to a tax attorney. If you do, you could be putting your case at risk, and lowering your chances of securing the best possible outcome.

There are plenty of Houston tax attorneys out there, but none have the experience, knowledge, and tenacity of Ronald A. Stearns Sr. with several honors, you can trust that he will provide you with intelligent and thorough solutions to provide efficient tax results.

After devoting 26 years to tax law, you can trust that he will strive to minimize your tax obligations and push back against the Texas Comptroller so that you’re treated justly.

Failing to pay your franchise tax could cause colossal problems for you. Don’t hesitate any longer. Contact Ronald Arthur Stearns Sr. PLLC at 210-853-2135 today.