New Veteran-Owned Businesses and Texas Franchise Tax

Texas Veteran Owned Business Certification

Texas Veteran Owned Business Certification

A qualifying new veteran-owned business is not subject to franchise tax for its initial five-year period, but must file Form 05-163, Texas Franchise Tax No Tax Due Report (PDF), for each of those years. For more information, see Texas Tax Code Section 171.0005 and Rule 3.574, Margin: New Veteran-Owned Businesses.

To be considered a new veteran-owned business, an entity must:

  • be an entity formed or organized in Texas on or after Jan. 1, 2016, and before Jan. 1, 2020;
  • be 100 percent owned by a natural person or persons with each owner being an honorably discharged veteran from a branch of the U. S. Armed Services; and
  • provide a Texas Veterans Commission (TVC) issued Letter of Verification of Veteran’s Honorable Discharge for each owner.

The Comptroller’s office verifies this information. If during the initial five-year period, a new veteran-owned business no longer meets the above criteria, the business:

  • must notify the Comptroller’s office; and
  • becomes subject to franchise tax

Verification Process for a New Veteran-Owned Business

For your new veteran-owned business to qualify for the five-year franchise tax exemption, you must complete three steps. Here are the steps to follow:

Step 1 – Request a Letter of Verification of Veteran’s Honorable Discharge from the Texas Veteran’s Commission (TVC):

To receive a Letter of Verification of Veteran’s Honorable Discharge (which will include a unique alpha-numeric identification code), each veteran-owner must email a request, along with their Department of Defense Form 214 (DD214), to the TVC at [email protected]. Please block out the Social Security number on the DD214 before emailing.

Each emailed request must include:

  • the date of the request
  • the veteran’s:
    • first name, middle initial, last name;
    • mailing address;
    • city, state, ZIP code;
    • telephone number;
  • the following statement: “In accordance with the verification provision of Senate Bill 1049 I am hereby requesting verification of my status as a Veteran of the United States Military.”
  • the veteran’s signature

Step 2 – Complete Comptroller Form 05-904:

Once all owners have received their Letter of Verification of Veteran’s Honorable Discharge from the TVC, complete Comptroller Form 05-904, Certification of New Veteran-Owned Business (PDF).

You must enter each owner’s:

  • name
  • unique identification code from their Letter of Verification of Veteran’s Honorable Discharge
  • percentage of ownership in the business
  • signature.

Use as many pages as necessary to identify 100 percent ownership in the business.

Step 3 – Submit Required Formation/Registration and Verification Documents:

A veteran-owned business must either form with the Secretary of State (SOS) or register with the Comptroller’s office. Please use the instructions below to complete Step 3.


If you formed, or are forming, a new veteran-owned business as a corporation, limited liability company, limited partnership, limited liability partnership or professional association, you must file these documents with the SOS:

Documents may be sent to:

Secretary of State
P.O. Box 13697
Austin, TX 78711-3697

Contact the SOS at 512-463-5555 for filing assistance.


If you formed, or are forming, a new veteran-owned business as any other entity type that is subject to franchise tax, you must file these documents with the Comptroller’s office:

Documents may be sent to:

Comptroller of Public Accounts
P.O. Box 149348
Austin, TX 78714-9348

Contact the Comptroller’s office at 512-463-4402 for assistance.

Verified Member | Veteran Owned Business

Come join NOW over 35,000 VOB Members. Add your business to the Veteran Owned Business Directory and grab one of our Verified Veteran Owned Business or Certified Veteran Owned Business badges for your website!

The above state certification information was brought to you by Veteran Owned Business.   Veteran Owned Business is in no way affiliated with the above organization(s). We do not in any way endorse the above business/organization or guarantee the above news/press release.  The Veteran Owned Business Project is simply providing information we feel is of interest to veterans, active duty military, reservists, service disabled veterans, veteran owned businesses, service disabled veteran owned businesses, families of veterans, families of our armed forces and any other person or persons directly or indirectly involved with the United States military community.

If your business is (or you know of another business) owned by a veteran (VOB), active duty military, reservist or military spouse of the United States, Army, Air Force, Marines, Navy, Coast Guard or National Guard, please be sure to visit the sign up page to get your membership and business’ profile.

The objective of our FREE Veteran Owned Business Directory is to continue to offer a growing list of products and services that are unique in the fact that they are all owned by, sold by and/or serviced by past and present military members!

Be sure to check out our new national and state Veteran Owned Business Certification and Service Disabled Veteran Owned Business (SDVOSB) section or VOB/SDVOSB Certifications by State: AL AK AZ AR CA CO CT DC DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY

Looking to hire here in the not too distant future?  Be sure to add your job(s) at no cost by visiting our new Veterans Hire Veterans Employment Network!

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