On Wednesday, April 15, the last day to pay taxes, Gov. Greg Abbott announced his plan to reduce the business franchise tax in Texas.
At an Austin press conference, Abbott outlined how his plan to reduce the franchise tax will enable Texas businesses to create more jobs and spur economic growth.
“I have traveled across the State of Texas and heard from so many employers that the business franchise tax places a complicated and an unfair burden on businesses that prevents employers from reinvesting profits to grow their business and hire more Texans,” Abbott said. “That is why I will reject any budget package that does not include genuine tax relief for Texas’ job creators.”
Appearing with Abbott was Ellen Wood, CEO of vcfo, a finance, human resources and recruiting professional services firm with Texas-based offices in Austin, Houston and Dallas.
“As an entrepreneur and board member for many organizations, I’ve seen firsthand the impact companies face as a result of the business franchise tax,” said Wood.
“Vcfo has seen more than a 25-fold increase in the tax. Additionally, we had to pay significant five-figure franchise tax bills in years following the recent economic crash when our Texas operations barely broke even. The cost savings and expanded investment resulting from a reduction in franchise taxes will, in turn, benefit Texas employees, their families and our communities.”
The Texas franchise tax is a privilege tax imposed on corporations, including banking corporations and limited liability companies, that are chartered in Texas.
The tax is also imposed on non-Texas corporations that do business in Texas.
The franchise tax rate is 1 percent for most entities, according to the Office of the Texas Comptroller.