Friends, I wanted to show you the tax cut plan that Texas House Republicans proposed last week. The plan’s focus is on job creation and overall economic expansion. Please read below, but if you would like more details see HB 31 & HB 32.
➢ The House tax cut plan provides the broadest benefits to taxpayers, delivering tax relief to big businesses and small business, homeowners and renters, and every single Texan across the state.
➢ At $4.87 billion, it is the largest tax cut on the table, and provides permanent tax relief: it cannot be eroded by local tax hikes or rising appraisals.
➢ It gives a tax cut to all businesses that currently pay the franchise tax rather than shifting 100 percent of the franchise tax burden to five percent of businesses.
➢ It protects the integrity of the spending cap, while reducing the state tax burden and state spending; it shrinks government rather than shifting a growing spending burden to the state to buy down property tax rates.
➢ It reduces the state sales tax for the first time since it was enacted more than 50 years ago, and provides tax relief to 900,000 businesses not paying the franchise tax.
➢ The combination of franchise tax cuts and sales tax relief will have the most dynamic impact on the Texas economy.
• HB 31 cuts the state sales tax rate from 6.25% to 5.95%. This is real, tangible tax relief that will benefit families and businesses of all sizes every time they buy something.
• Today, Texas has the 12th highest state sales tax rate in America. HB 31 will drop Texas on that list to #26.
• HB 32 cuts the franchise tax rate by 25% across-the-board for all businesses, large and small, that currently pay the franchise tax. Retailers and wholesalers will pay 0.375%, and all other businesses will pay 0.75%.
• This approach maintains the original intent of the franchise tax, which was to create a tax structure that was broad, fair and low… so that everybody helps to carry a little bit of the load.
• And HB 32 expands eligibility for the EZ computation by doubling the cap to $20 million in total revenue, and lowers the EZ rate from 0.575% to 0.331%. This will substantially lower the cost of compliance for thousands of small businesses.