October 13, 2016

Each year, the Comptroller’s office works with tax preparation software vendors in the approval of the forms they develop for reporting Texas franchise tax. The software helps tax preparers calculate accurate franchise tax returns, which they print and mail to us for processing.

New for 2011 is the Franchise Tax Web Service. With this technology, software vendors can develop software using XML schemas to securely transmit franchise tax reports and payments to the Comptroller. Tax practitioners using this software will be able to electronically submit tax returns for their clients. The main advantage of this method of electronic submission is receiving immediate feedback about a return’s accuracy. Approved vendors will have a “dashboard” (or similar method) to allow a practitioner to log in and check the status of the returns filed.

For example, a practitioner might receive a message that a particular return was received, but accounting year information was omitted for two affiliates. This process will give the preparer time to correct the errors before the Comptroller sends a notice to the taxpayer.

Practitioners will be able to file on behalf of their clients if they have either the taxpayer’s WebFile number (included with the “report due” letter we send each taxpayer in February), or if they know the taxpayer’s total revenue as reported on the last report on file.

Texas’ electronic reporting system is recommended for even the largest taxpayers with multiple affiliates. Three major software vendors are currently in “pending approval” status.