CONTACT US

Texas Governor Signs Franchise Tax Reduction Act of 2015 (Summary)

On June 15, 2015, Texas Governor Greg Abbott signed the Franchise Tax Reduction Act of 2015 which permanently reduces the state franchise tax rate.  For reports originally due on or after January 1, 2016 the rate will be .75%; a change of 25% from its original value of 1%. In addition, for reports originally due on or after January 1, 2015 and before January 1, 2016, the temporary permissive alternate rate is 0.95%.

For wholesalers and retailers, the rate for any report originally due on or after January 1, 2016 will be 0.375% and the temporary permissive alternate rate applicable to reports originally due on or after January 1, 2015 and before January 1, 2016 will be 0.475% of taxable margin.

This act also revises the E-Z Computation and rate calculation for the franchise tax.  For reports that are originally due on or after January 1, 2016, a taxable entity whose total revenue from its entire business is not more than $20 million (formerly $10 million) can elect to pay the franchise tax under the E-Z Computation and rate.  The computation is due by (1) determining the taxable entity’s total revenue from its entire business, (2) apportioning that amount to determine the taxable entity’s apportioned total revenue to Texas, and (3) multiplying that amount by 0.331% (the former E-Z Computation rate was 0.575%). 

For more information regarding the franchise tax reductions click here.

Have Questions or Comments?

If you have any questions about this media item, we'd like to hear your opinion. Please share your thoughts with us.

Contact EisnerAmper

* Required