Texas franchise tax — my foreign-owned LLC has $0 Texas activity. Am I still on the hook?

Texas franchise tax is a 'privilege tax' on each taxable entity formed in Texas OR doing business in Texas. The word 'or' is doing a lot of work there: even if the LLC has zero Texas customers, zero Texas property, and zero Texas employees, the fact that it's formed in Texas keeps it in the franchise-tax / Public Information Report regime year after year. There's no zero-activity exemption based on operations.

For 2026, the franchise no-tax-due threshold is $2.65 million in total revenue. Below that — which includes $0 — you owe no franchise tax. But you must still file the PIR (form 05-102) by May 15 every year. The PIR has no filing fee. Skipping it triggers forfeiture of the entity's right to do business in Texas, which then complicates closing accounts, transferring assets out, or formally dissolving the LLC down the road.

If you genuinely have zero Texas connection and don't expect any, you have three clean paths: (1) Keep the entity and file the no-fee PIR each May — straightforward but recurring administrative work, (2) Convert/domesticate the Texas LLC into a Wyoming or New Mexico LLC under Texas Business Organizations Code § 10.101 — costs more upfront but ends the Texas obligation, or (3) Formally terminate the LLC with the Texas Secretary of State and re-form fresh in a cheaper state. Option 2 preserves history (EIN, banking, contracts), option 3 starts clean.

Ignoring the notices is the most expensive path. The franchise-tax forfeiture starts as a Secretary-of-State good-standing flag but eventually triggers an involuntary termination. After that, the LLC's name becomes available to others, the EIN is associated with a defunct entity for IRS purposes, and bank accounts get frozen. Reinstatement after forfeiture is more expensive than three years of on-time PIRs.