Bill > HB5181

This bill modifies the Texas Franchise Tax calculations by increasing the total revenue threshold from $2.47 million to $3.0 million, below which a taxable entity is not required to pay any tax. The bill maintains the existing tax rate structure, which includes a 0.75 percent rate for most businesses and a lower 0.375 percent rate for entities primarily engaged in retail or wholesale trade, subject to specific qualifying conditions. These conditions include having more revenue from retail or wholesale trade than other trades, meeting certain product sales limitations, and not providing retail or wholesale utilities. The bill clarifies that telecommunications service providers selling prepaid calling cards are not considered utility providers. The changes do not affect tax liabilities accruing before the effective date, which is set for January 1, 2026, ensuring that existing tax obligations remain unchanged and that the former law continues to apply for tax collection and enforcement purposes.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB5181