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Annual report, franchise tax, and income tax are three different obligations

An annual report updates a company's record with the state business office, and it is not a financial statement. A franchise tax is a tax on the privilege of doing business in a state; in Texas the franchise tax report is the recurring filing. An income tax return is separate and goes to the IRS and the state tax authority.

Last checked against the official sources listed on this page.

The annual report

An annual report updates or confirms what the state has on record for a company. Florida's Division of Corporations says the form updates or confirms its records, is not a financial statement, and must be filed each year for the entity to stay active, whether or not anything changed (Division of Corporations, citing Chapters 607, 617, and 620, F.S.).

Florida's annual report is due by 11:59 PM EST on May 1. After that a $400 late fee is assessed, and an entity that has not filed by the third Friday in September is administratively dissolved or revoked at the close of business on the fourth Friday in September. The LLC annual report carries a $138.75 fee, which becomes $538.75 once the late fee applies.

The report can be filed online with a credit card, a debit card, or a prepaid Sunbiz e-file account, or mailed with a check or money order. A mailed payment must be postmarked on or before May 1 to avoid the fee, while an online filing posts immediately. A business that has closed does not file the report and instead files to dissolve or withdraw.

The franchise tax

Texas imposes a franchise tax, which the Comptroller describes as a privilege tax on each taxable entity formed or organized in Texas or doing business in Texas. The annual franchise tax report is due May 15, and a report filed after the due date draws a $50 penalty.

For report years 2026 and 2027 the no-tax-due threshold is $2,650,000. An entity at or below the threshold still files a Public Information Report or Ownership Report even though it owes no tax.

An annual tax with no report

A Delaware LLC does not file an annual report, but it pays an annual tax of $400 due on or before June 1. Paying late adds a $200 penalty and interest at 1.5% per month. Delaware corporations are different: they file an annual report and pay a franchise tax.

Where income tax fits

Income tax is a separate obligation from the state filing. Federal income tax treatment follows the IRS rules for how an LLC is classified, and the business reports to the IRS on the return that matches that classification. A state income tax return, where one applies, goes to the state's tax authority.

Telling the three apart

An annual report does not report income. In Texas the franchise tax report goes to the Comptroller, and the Secretary of State keeps the entity's registration. Two things identify an obligation: the office that receives the filing and what the filing asks for.

If the office is the business registry, the filing is a record update. If the office is a tax authority and the filing computes a tax on revenue or the privilege of doing business, it is a franchise tax. If the filing computes tax on profit and is filed with the IRS or a state department of revenue, it is an income tax return.

Related page on vermilionvitez.com: https://vermilionvitez.com/blog-llc-compliance-checklist

Official sources

FAQ

Is an annual report the same as a tax return?

No. An annual report keeps the state business registry current and, in Florida, is explicitly not a financial statement. A tax return reports income or a tax owed to a tax authority.

Which one applies to my LLC?

It depends on what the state's business office and its tax authority each require. A state can require both a registry filing and a tax report, or only one. Texas, for example, uses the franchise tax report as the recurring filing, while Florida uses an annual report and Delaware charges a flat annual tax to an LLC with no report.

Why does one state call it an annual report and another call it a franchise tax?

States structure their recurring filings differently. Texas charges a privilege tax and calls the filing a franchise tax report; Florida charges a fixed annual report fee; Delaware charges an annual tax and asks for no report at all for an LLC.

This page is general information about how a filing works, taken from the official sources listed above. It is not legal, tax, or financial advice, and it does not recommend any business structure. Confirm current forms, fees, and deadlines on the official source before you file.

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