Last week the Texas House of Representatives passed an important piece of legislation. House Bill 28 is vital to progressing conservative principals and continuing to cultivate economic growth for all Texans. This legislation begins the process of phasing out the Texas franchise tax.
House Bill 28 will put the state franchise tax on a steady track toward a complete repeal through our state surplus money. This legislation will have the state use excess state revenues to cut the rate of the franchise tax. This will provide a proportionate tax relief for all Texas businesses paying the tax. The bill will require the Texas Comptroller of Public Accounts to determine the ending balance of general revenue related funds from the preceding biennium in each odd-numbered year. The Comptroller will then take that number, calculate the needed rate, and then subtract that rate from the existing rate to determine the new lower rate.
Once the franchise tax rates reach less than 15 percent, the tax is automatically repealed. Under the provisions of House Bill 28, we could see the franchise tax eliminated by 2024. Now that House Bill 28 has been approved by the full Texas House, it will move to the Texas Senate for further consideration.
The Texas Legislature is dedicated to help provide Texans the tools needed to practice personal liberty and fiscal responsibility. House Bill 28 will eliminate the Texas franchise tax once and for all, allowing Texas to continue being the best state in the country in which to do business.