Tuesday, 06 August 2013 17:42

Texas Governor Signs Franchise Tax Bil

The Texas Franchise Tax legislation, supported by the Automotive Service Association (ASA) and ASA-Texas, was included in Substitute House Bill 500, which recently passed the Texas legislature, and has now been signed by Texas Gov. Rick Perry.

Currently, automotive service and collision repair shops owned and operated by new or used car dealerships are taxed at half the rate used to tax independent automotive repair facilities doing identical work. The state classified new and used car dealerships as "retail" operations, but not independent repair operations.

The Texas state tax code classifies dealership sales as “retail” and allows their service and repair business to be included under that banner. Independent automotive repairers have not had the same opportunity.

The new law reclassifies independent repair shops as retail trade—cutting their tax bill in half and giving them a level playing field with car dealerships.

The Texas Franchise Tax legislation, included in Substitute H.B. 500, states that “the activities classified as Industry Group 753 of the 1987 Standard Industrial Classification Manual published by the federal Office of Management and Budget fall under Retail Trade,” addressing the Texas inequity.

ASA thanks its Texas members for rallying around Substitute H.B. 500. To view this legislation in its entirety, visit ASA’s legislative website at www.TakingTheHill.com.

The Texas Franchise Tax legislation, included in Substitute H.B. 500, states that “the activities classified as Industry Group 753 of the 1987 Standard Industrial Classification Manual published by the federal Office of Management and Budget fall under Retail Trade,” addressing the Texas inequity.

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