88R11062 CJD-D
By: Paxton S.B. No. 1605
A BILL TO BE ENTITLED
AN ACT
relating to the reduction of the rates of the franchise tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 171.002(a) and (b), Tax Code, are
amended to read as follows:
(a) Subject to Sections 171.003 and 171.1016 and except as
provided by Subsection (b), the rate of the franchise tax is 0.6
[0.75] percent of taxable margin.
(b) Subject to Sections 171.003 and 171.1016, the rate of
the franchise tax is 0.3 [0.375] percent of taxable margin for those
taxable entities primarily engaged in retail or wholesale trade.
SECTION 2. Section 171.1016(b), Tax Code, is amended to
read as follows:
(b) The amount of the tax for which a taxable entity that
elects to pay the tax as provided by this section is liable is
computed by:
(1) determining the taxable entity's total revenue
from its entire business, as determined under Section 171.1011;
(2) apportioning the amount computed under
Subdivision (1) to this state, as provided by Section 171.106, to
determine the taxable entity's apportioned total revenue; and
(3) multiplying the amount computed under Subdivision
(2) by the rate of 0.265 [0.331] percent.
SECTION 3. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 4. This Act takes effect January 1, 2024.