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Texas Legislature enacts permanent franchise rate reduction


By Jo Chadwick, LGT

Texas Gov. Greg Abbott recently signed H.B. 32 to permanently reduce the Texas franchise tax rate (margin tax) for reports due on or after Jan. 1, 2016.

The applicable report rates beginning in 2016 are as follows.

  • The EZ tax rate of 0.331 percent may be used (elected) for entities with taxable revenue (margin) of $20 million or less.
  • The tax rate will be 0.375 percent of taxable income for taxpayers who are primarily engaged in the retail and wholesale trade.
  • For all other taxpayers beginning in 2016, the Texas franchise reporting rate will be 0.75 percent of taxable revenue.

Seek the services of a legal or tax advisor before implementing any ideas contained in this blog. To reach a financial advisor at Lane Gorman Trubitt PLLC, call (214)871-7500 or email