United States

Texas: Franchise Tax Reductions Signed Into Law

Jun 22, 2015
From KPMG TaxWatch

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House Bill 32, the Franchise Tax Reduction Act of 2015, was signed into law on June 15, 2015. The bill, which applies to original reports filed on or after January 1, 2016, permanently reduces Texas franchise tax rates. Specifically, the general one percent rate will be reduced to 0.75 percent. The 0.5 percent rate that applies to taxpayers primarily engaged in wholesaling and retailing will be reduced to 0.375 percent. Another provision of the bill provides relief to small businesses.  Currently, a taxable entity may elect the EZ computation (and reduced rate) if its total revenues are not more than $10 million. Under the revised law, a taxable entity may elect the EZ method if its total revenue does not exceed $20 million. House Bill 32 also reduces the franchise tax rate for taxpayers electing the EZ computation from 0.575 percent to 0.331 percent.  Please contact Doug Maziur at 713-319-3866 with questions on the Texas rate reductions.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.