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Texas House Republicans Pass $170 Million Tax Exemption for Small Businesses
by Carrie Simmons

AUSTIN - Today, Texas House Republicans brought relief to small business owners via House Bill 4765, which raises the franchise tax revenue exemption for businesses from $300,000 to $1,000,000.

"In these tough economic times, Texas' small businesses need this immediate relief to create jobs, maintain current levels of employees and their salaries, as well as their current levels of employees' insurance," Rep. Ken Paxton, Joint Author, said. "Small business owners are our state's job creators, representing 70 percent of all new jobs created in Texas."

By raising the small business tax exemption from $300,000 to $1,000,000, approximately 230,000 additional businesses will qualify to exempt from paying the margins tax. Decreasing the tax burden on small businesses allows for continued growth and expansion of Texas businesses during this strenuous economic climate. This bill allows the expanded exemption thru 2011. Placing a two year sunset provision on the exemption will force the Legislature to re-evaluate the margins tax during the 82nd Legislature.

The margins tax was created in House Bill 3 in 2006. The effects of this tax hit hardest on the small business owners of Texas. House Bill 4765 extends relief to those businesses that continue to provide Texas with a healthy economic environment.

"Small businesses are a part of the economic engine that keeps our state moving forward," Rep. Larry Taylor, Chair of the House Republican Caucus, said. "This bill will give $172,000,000 tax relief directly to small businesses in Texas, providing true economic stimulus."

HB 4765 was passed unanimously on third reading this afternoon.
 
 

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