My co-founder is not a veteran. Can we still qualify?

No. The statute requires the business to be owned entirely by honorably discharged veterans, and there is no de minimis allowance.

Is this ending in January 2026?

No. That expiry was removed by the 89th Legislature effective 1 September 2025, so the five-year exemption is now permanent.

I already paid the filing fee. Can I get it back?

No. The waiver has to be claimed at the point of filing, with the verification letter attached, which is why the order matters so much.

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New Veteran-Owned Business — Five Years Free of Franchise Tax and Filing Fees

A new business wholly owned by honorably discharged veterans pays no Texas franchise tax and no Secretary of State filing fees for its first five years.

Verified August 17, 2026

What this benefit is

A new business owned entirely by honorably discharged veterans pays no Texas franchise tax and no Secretary of State filing fees for its first five years.

The filing fee waiver alone is worth $300 at formation of an LLC or corporation.

What it's worth: No franchise tax and no filing fees for five years

Shown as a range because franchise tax scales with revenue, and a business below the no-tax-due threshold would owe nothing anyway. It is excluded from your annual total for that reason.
The Secretary of State filing fee waiver is worth $300 on an LLC or corporation formation immediately.

Who is entitled to it

A business formed within the last five years,
owned 100 percent by one or more honorably discharged veterans,
formed in or doing business in Texas.

Not sure whether that describes you?

Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.

The thing most people get wrong

One hundred percent, and the verification letter has to come first

Two traps, both avoidable and both expensive. First, the ownership test is 100 percent — not the 51 percent that almost every other veteran business programme uses. A single non-veteran co-founder with a two percent share defeats it entirely. Second, order matters: you need the Texas Veterans Commission's Letter of Verification of Veteran's Honorable Discharge BEFORE you file your formation documents, because the Secretary of State cannot refund a filing fee you have already paid. Get the letter, then file.

How to claim it

Deadline: At formation — the fee waiver cannot be applied afterwards

1Get a Letter of Verification of Veteran's Honorable Discharge from the Texas Veterans Commission first. The Secretary of State will not waive the fee without it.
2File your formation documents with the verification letter attached.
3Register with the Comptroller and claim the franchise tax exemption.

File with: Texas Secretary of State at formation, then the Comptroller
Documents you will need: dd214 · letter of verification of veteran status
Renew annually: You still file an annual franchise tax report showing the exemption. Not filing is a separate problem from not owing.

Common mistakes that cost people this benefit

Filing formation documents before requesting the TVC verification letter.
Assuming a 51 percent veteran-owned business qualifies. It does not.
Believing the programme is expiring. It was created with a 1 January 2026 expiry, and the 89th Legislature removed that expiry effective 1 September 2025. Guidance written before mid-2025 says otherwise and is out of date.
Not filing an annual franchise tax report. You still file one showing the exemption — not owing and not filing are different problems.

Worth knowingThis exemption was created with an expiry date of 1 January 2026. The 89th Legislature removed that expiry effective 1 September 2025, so it is now permanent. Guidance written before mid-2025 says it is ending; that is out of date.

Worth knowingThe ownership test is 100 percent, not 51 percent. A veteran-owned business with a single non-veteran co-founder does not qualify, however small their share. This trips people up because almost every other veteran business programme uses 51 percent.

Worth knowingOrder matters. The verification letter has to exist before you file with the Secretary of State — the fee waiver is not refundable once you have paid it.

Questions people ask

My co-founder is not a veteran. Can we still qualify?: No. The statute requires the business to be owned entirely by honorably discharged veterans, and there is no de minimis allowance.
Is this ending in January 2026?: No. That expiry was removed by the 89th Legislature effective 1 September 2025, so the five-year exemption is now permanent.
I already paid the filing fee. Can I get it back?: No. The waiver has to be claimed at the point of filing, with the verification letter attached, which is why the order matters so much.

Sources

authority · statuteTex. Tax Code §171.0005; Bus. Orgs. Code §4.158
operating · published policyTexas Secretary of State — Business Information for Veterans

This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.