Texas Senate Bill SB1477

Texas 2025 - 89th Regular

• Filed: 2/20/25

Caption

Relating to a franchise tax credit for a taxable entity that participates in the federal electronic verification of employment authorization program.

Impact

If passed, the bill will amend Chapter 171 of the Texas Tax Code by adding a new subchapter that sets forth the qualifications and application process for the tax credit. The amount of the credit will equate to the franchise tax due for the reporting period, creating a significant potential benefit for compliant companies. By incentivizing participation in the E-Verify program, the bill seeks to mitigate illegal employment practices and enhance the integrity of the workforce in Texas.

Summary

SB1477 proposes a franchise tax credit for taxable entities that participate in the federal electronic verification of employment authorization program, known as E-Verify. This bill aims to encourage businesses to verify the employment eligibility of their employees by providing a financial incentive, thereby promoting compliance with federal employment laws. The credit is available only to those entities that register for and actively engage with the E-Verify program for a minimum period of 12 consecutive months.

Contention

Notably, there may be points of contention surrounding SB1477 regarding privacy and the burden of compliance on small businesses. Critics might raise concerns about the implications of mandatory verification processes and the additional administrative work required to maintain participation in the E-Verify program. Furthermore, there could be debates on whether such financial incentives genuinely address the issues of employment verification or merely serve as a means for the government to shift responsibility onto private entities.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 171. Franchise Tax
  • Section: New Section

Government Code

• Chapter 673. Verification Of Employee Information
  • Section: New Section