HB5181 - Relating to the minimum revenue calculation subject to the Texas Franchise Tax.

      By: Dean H.B. No. 5181       A BILL TO BE ENTITLED   AN ACT   relating to the minimum revenue calculation subject to the Texas   Franchise Tax.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 171.002, Tax Code, is amended to read as   follows:          Sec. 171.002.  RATES; COMPUTATION OF TAX. (a) Subject to   Sections 171.003 and 171.1016 and except as provided by Subsection   (b), the rate of the franchise tax is 0.75 percent of taxable   margin.          (b)  Subject to Sections 171.003 and 171.1016, the rate of   the franchise tax is 0.375 percent of taxable margin for those   taxable entities primarily engaged in retail or wholesale trade.          (c)  A taxable entity is primarily engaged in retail or   wholesale trade only if:                (1)  the total revenue from its activities in retail or   wholesale trade is greater than the total revenue from its   activities in trades other than the retail and wholesale trades;                (2)  except as provided by Subsection (c-1), less than   50 percent of the total revenue from activities in retail or   wholesale trade comes from the sale of products it produces or   products produced by an entity that is part of an affiliated group   to which the taxable entity also belongs; and                (3)  the taxable entity does not provide retail or   wholesale utilities, including telecommunications services,   electricity, or gas.          (c-1)  Subsection (c)(2) does not apply to total revenue from   activities in a retail trade described by Major Group 58 of the   Standard Industrial Classification Manual published by the federal   Office of Management and Budget.          (c-2)  For purposes of Subsection (c)(3), the provision of   telecommunications services does not include selling telephone   prepaid calling cards.          (d)  A taxable entity is not required to pay any tax and is   not considered to owe any tax for a period if:                (1)  the amount of tax computed for the taxable entity   is less than $1,000; or                (2)  the amount of the taxable entity's total revenue   from its entire business is less than or equal to [ $2.47 ] $3.0     million or the amount determined under Section 171.006 per 12-month   period on which margin is based.          SECTION 2.  The changes in law made by this Act do not affect   tax liability accruing before the effective date of this Act. That   liability continues in effect as if this Act had not been enacted ,   and the former law is continued in effect for the collection of   taxes due and for civil and criminal enforcement of the liability   for those taxes.          SECTION 3.  This Act takes effect January 1, 2026.