Tex. Tax Code Sec. 171.0002 defines which business entities are ‘taxable entities’ subject to Texas franchise tax. Subsection (a) lists most entity types — including corporations, LLCs, limited partnerships, and limited liability partnerships — as taxable entities by default, with no ownership-based exception available.
Subsection (b)(2) creates one narrow exception: a general partnership is NOT a taxable entity if its direct ownership is composed entirely of natural persons AND its liability is not limited under any state’s statute, including by registering as an LLP. Registering as an LLP — or having any non-natural-person partner — forfeits this exception entirely; the partnership then becomes a taxable entity the same as any other, with franchise tax and Public Information Report (PIR) filings required regardless of partner composition.