(Austin) The Texas House of Representatives passed House Bill 28, which will put the franchise tax on a steady track towards a complete repeal. HB 28 uses excess state revenues to cut the rate of the tax, providing proportionate tax relief for all Texas businesses paying the tax.
House Bill 28 includes the following provisions:
• in December of each odd-numbered year the Comptroller of Public Accounts will determine the ending balance of general revenue related funds from the preceding biennium.
• The Comptroller will then take that number, or $3.5 Billion, whichever is less, and calculate the rate that would raise that amount.
• Finally, the Comptroller will subtract that rate from the existing rate to determine the new, lower rate.
• Once the Franchise Tax rates reach less than 15%, the Franchise Tax is automatically repealed. Under the provisions of HB 28, we could see the franchise tax eliminated as soon as 2024.
“Republicans in the Texas House are committed to phasing out the Texas franchise tax once and for all. I am proud of the work that Chairman Dennis Bonnen and my Republican colleagues have done to put Texas on a solid track towards complete elimination of this burdensome tax,” said Chairman Tan Parker.
Now that HB 28 has been approved by the full Texas House, it will move to the Texas Senate for further consideration.
The purpose of the Caucus is to provide research, education, policy development and other support to the Caucus Members and their staff. The Texas House Republican Caucus works to promote limited government, fiscal responsibility and personal liberty to continue cultivating economic growth for all Texans.