Gov. Rick Perry wants to keep a small-business tax break approved by lawmakers two years ago that, without legislative action, will require more businesses to pay franchise taxes.
The 2009 legislation increased the amount of money a company can bring in before it's subject to the state's corporate franchise tax, and was touted at the time as a way to keep most of the tax income coming in while freeing thousands of businesses from writing checks. The big taxpayers who pay most of the taxes were still paying, but an estimated 39,000 taxpayers were set free at a cost of about $172 million. The money was matched up with another tax on smoke-free tobacco, and sold as a tax swap that didn't cost the state treasury anything.
The original exemption was $300,000, meaning a company could have gross revenues of that amount and still not owe the tax. The legislation passed two years ago raised that to $1 million for the first two years, but would drop it back down to $600,000 next year unless lawmakers act. The number of businesses that would be affected and the value of the total tax break weren't immediately available.
Perry said in a speech in Houston today that he wants them to keep it at $1 million.