Do passive entities have to file reports?
An entity that is registered with the Comptroller’s office or the Texas Secretary of State’s office must establish its passive status by filing a no tax due information report, form 05-163, for the period upon which the tax is based. The passive entity should blacken the circle in Item 1, enter the accounting period in Items 5a and 5b and sign the report. Passive entities are not required to file an Ownership Information Report. The entity will not be required to file franchise tax reports after filing the first report, as long as the entity continues to qualify as passive. If a partnership or trust qualifies as a passive entity for the period upon which the franchise tax report is based and is not registered with the Comptroller’s office or the Texas Secretary of State’s office, it will not be required to register or file a franchise tax report with the Comptroller’s office. In both cases, if the partnership or trust subsequently loses its status as a passive entity, it must file a Fo
