The first step in closing your business in Texas is to close out all of your business tax accounts. You can close these by making sure they are totally paid off and by filing a final return for each account.
Step 1: Close Franchise Tax Account
A. File this Year's Annual Report/Return
Businesses must make sure to file the current year's Franchise Tax Return as well as the Annual Franchise Tax Public Information Report. You can see more information on this report through our website.
B. Pay Due Franchise Tax
In order to be allowed to close your franchise tax account, you must have to the total balance paid off in its entirety. This includes any tax due, penalties, interest, and fees.
C. Submit Final Franchise Tax Return
After you have paid off your franchise tax balance, you may file your final return to the Texas Comptroller. This return must include data from the day after your last franchise tax return accounting period to within 60 days of your account closing.
An example of this would be: if your franchise tax accounting period ended on May 15, 2015, and your business closed November 23, 2015, then you would have to include data from May 16 - September 24.
Step 2: Close Other Tax Accounts
In addition to franchise tax, your business may have other tax accounts it needs to close. As with Franchise tax, you will need to make sure the accounts are paid off in their entirety before you file a final return. Here is a list of some of the accounts you are most likely to have to pay off.
Step 3: Obtain Certificate of Account Status
After you have closed all your Texas tax accounts, you can file Form 05-359: Request for Certificate of Account Status to Terminate a Taxable Entity's Existence in Texas or Registration.
After you have submitted your forms and been approved you will receive them either by mail, fax, or online in a PDF format.
Once you have your Certificate of Account Status from the Texas Comptroller, your final step will be to file your Certificate of Termination alongside your Certificate of Account Status. Once you have done this and your documents have been filed, your business will no longer legally exist
Submit Certificate of Termination
If you elect to file your Certificate of Termination by mail you will need to submit two signed copies alongside a physical copy of your Certificate of Account Status. While there are no definitive forms provided by the State of Texas, the State does provide forms that meet the minimum requirements for filing.
Attach Certificate of Account Status
If you elect to file your Certificate of Termination online, you must include the Certificate of Account Status provided to you by the Texas Comptroller. If you include anything other than the official Certificate, your request to terminate will be rejected.