Bill > SB2774

This bill amends the Texas Tax Code to expand the definition of "retail trade" for franchise tax purposes by adding a new category of business activities. Specifically, the bill includes activities involving the rental of industrial uniforms, industrial garments, and industrial linen supplies, which are classified under Industry 7213 or 7218 in the 1987 Standard Industrial Classification Manual published by the federal Office of Management and Budget. The existing definition of retail trade already encompasses various activities such as those described in Division G of the manual, apparel rental, certain equipment rental, and rental-purchase agreements. The bill applies only to tax reports due on or after its effective date of January 1, 2027, which means businesses providing industrial uniform and linen rental services will be classified under retail trade for franchise tax calculations starting in 2027. This change could potentially affect how these businesses are taxed and classified for state tax purposes.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=SB2774