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Texas state Rep. Harvey Hilderbran, of Kerrville, has filed legislation to promote small business development in Texas by permanently extending a tax exemption for companies that earn less than $1 million a year.
In 2009, the Texas Legislature temporarily raised the franchise tax revenue exemption for small businesses to $1 million, offering tax relief to nearly 40,000 additional small businesses across the state.
Hilderbran filed legislation in 2011 to make that exemption permanent, but – despite strong support from Gov. Rick Perry and the business community – the legislative session ended before the full House voted on the issue. Hilderbran was able to amend legislation that extended the $1 million exemption through the end of 2013.
“Texas’ positive business climate, including the $1 million franchise tax exemption, has helped keep unemployment below the national average and job-creation above it,” Hilderbran said in an announcement released by the House of Representatives. “Permanently extending the exemption will help attract new businesses to the state and encourage growth of those already here.”
In the 12 months prior to September, Texas added 270,000 jobs to its payroll, growing at a rate of 3.1 percent. The U.S. growth rate for that same period was only 1.7 percent.
A year after the legislature passed the 2009 exemption, the U.S. Department of Commerce reported that Texas created more jobs than any other state, and the Wall Street Journal credited the state’s low taxes and employer-friendly environment with helping make Texas the “job creation capital” of the nation.
Hilderbran, who serves as chairman of the House Ways and Means Committee, said that his committee will approve his bill early in the 2013 legislative session.
Hilderbran says 2.2 million small businesses in Texas create most of the jobs in the state.
The legislation is House Bill 213.