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Texas Franchise Tax (view source)
Revision as of 13:40, 21 September 2020
, 13:40, 21 September 2020no edit summary
{{Project|Has project output=Content,Guide|Has sponsor=McNair ProjectsCenter
|Has title=Texas Franchise Tax
|Has owner=Cindy Ryoo
|Has start date=October 30, 2017
|Has keywords=Texas, franchise , tax, small businesses, Greg Abbott
|Has project status=Active
}}
=Project Description=
The Texas Franchise Tax is a business tax imposed on all companies and corporations in return for state liability protections for doing business in the state. In 2006, the tax was rewritten in attempts to raise annual state revenue. In 2015, Governor Greg Abbott signed a legislative bill to decrease tax rates by 25%. These changes to the franchise tax make Texas a favorable business climate in terms of taxes, especially for smaller corporations.
=OverviewProgress Report=The Texas Franchise Tax is a business tax imposed Currently waiting on all companies and corporations in return for state liability protections for doing business in the state. In 2006, the tax was rewritten in attempts feedback from Anne to raise annual state revenuemake edits. In 2015, Governor Greg Abbott signed a legislative bill to decrease tax rates by 25%. These changes to the franchise tax make =Project Data Location= E:\McNair\Projects\Texas a favorable business climate in terms of taxes, especially for smaller corporationsFranchise Tax =Dependencies=None.
=What is the Texas Franchise Tax?=
*eliminate tax planning opportunities
*raise roughly $3 billion in new state revenue annually
Before these sweeping changes, the franchise tax only applied to corporations and limited liability companies (LLC). After 2006, the tax not only extended to partnerships and professional associations but also became a mixture of a tax on gross receipts as well as income, without fulling transforming into either of the two types of taxes. []
==2015==
**to 0.575% of revenue threshold of $10 million
[Table 2[File: insert Franchise_Tax_2015.jpg]] [[File:Franchise_Tax_2016-2017.jpg]] Tables adapted from: https://comptroller table for 2015 vs 2016.texas.gov/taxes/franchise/2017]
=Competitive Advantages of Doing Business in Texas=
Texas fosters a favorable tax environment by enforcing franchise taxes that are significantly lower than those of other states and not imposing a personal income tax. This is especially helpful for small businesses that are struggling to establish themselves and grow in their first years. Business that earn less than the EZ Computation Total Revenue Threshold of $20 million in annual revenue can instead file taxes through an EZ Computation Form that has a further reduced tax rate than the normal franchise tax (0.331%). Furthermore, Texas has a no-tax-due threshold of $1.1 million, which means that businesses that have a total annual revenue of less than or equal to $1.1 million are not required to pay any franchise taxes.
=Types of Businesses=
This information is adapted taken from [httphttps://comptroller.texas.gov]/taxes/publications/98-806.php:
==Entities Subject to Franchise Tax==
Each taxable entity formed in Texas or doing business in Texas must file and pay franchise tax. These entities include:
