The Texas House of Representatives passed House Bill 3928, the franchise tax correction bill, by Rep. Jim Keffer (Eastland), which increases the tax emption for small business in House Bill 3 passed during last year’s Third Called Special Session.
House Bill 3928 increases the small business franchise tax exemption from $300,000 to $600,000. Since the new exemption is indexed to inflation, the level of exemption will continue to increase.
According to the House announcement, the bill eliminates the double taxation of guaranteed payments to partners and corrects the net operating loss credit carry-forward provision allowing businesses to take their losses at 4.5 percent. A partnership re-organization loophole has also been closed to ensure that businesses do not avoid paying the franchise tax.
Source: Texas House of Representatives
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