On July 22, 2023, S.B. 3 was signed into law and enact the following important changes applicable to Texas franchise tax reports originally due on or after January 1, 2024. The bill will double the amount of a taxable entity’s total revenue that is exempted from the franchise tax from $1.235 million to $2.47 million. According to the state, this will eliminate the franchise tax for 67,000 small to medium sized businesses.
In addition, the bill will eliminate the requirement to file a No-Tax-Due franchise tax return when an entity does not owe any franchise tax to the state. This will alleviate the compliance pressure (both in time and money) for many taxpayers as well as tax practitioners going forward.