Texas Lawmaker Proposes More Tax Exemptions for Small Businesses

Texas State Rep. Brandon Creighton has filed HB 720 to give more small businesses an exemption from the state business tax. Current law exempts businesses with revenue under $300,000 and gives discounts to those who make up to $900,000. Under Creighton’s bill all businesses that have under $1 million in revenue would be completely exempt from the tax.

“I have heard from many local businesses that the franchise tax is hitting their businesses hard,” said Creighton, who represents part of Montgomery County. “Small businesses are the job engine of this state. This increased exemption encourages the spirit of entrepreneurship and will help create new and better paying jobs for Texans.”

With the State Comptroller’s revenue estimate projecting that the state will have less money available than last session, this is a only preliminary step to provide temporary assistance.

“Eventually I would like to completely eliminate the effects of the tax on small businesses by reforming or repealing the entire tax. However, with the current economic situation we have to start with incremental steps so these businesses can continue to contribute to our economy.”

Creighton filed a similar bill last session that ultimately resulted in tax relief for 60,000 more businesses. This session Senator Eliot Shapleigh (El Paso) is leading this issue in the Senate. Governor Perry is also expected to make tax relief for small businesses a priority in his upcoming State of the State address.

“I will continue talking about this issue until small businesses receive the relief they deserve,” said Creighton. “This remains an important priority of mine and I’m glad the governor has decided to focus on the issue as well.”

Source: Texas House of Representatives, www.house.state.tx.us/members/welcome.php

Topics Texas Legislation Commercial Lines Business Insurance