Corporations pay a tax on the greater of net taxable capital or net taxable earned surplus.
If a franchise tax report is not filed by the due date, the Comptroller may estimate the tax due and send a jeopardy determination to the corporation. The jeopardy determination becomes final in 20 days. Once the jeopardy becomes final, the Comptroller will assess a 10 percent determination penalty and may file liens, freeze bank accounts, seize assets or certify the account to the Texas Attorney General for collection. A nonprofit corporation seeking franchise tax exemption as a religious organization must be an organized group of people regularly meeting for the primary purpose of holding, conducting, and sponsoring religious worship services according to the rites of their sect. The corporation must be able to provide evidence of an established congregation showing that there is an organized group of people regularly attending these services.