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Read. Follow. Verify.Texas Bill Repeals State Franchise Tax Effective January 1, 2026
Last action · April 28, 2025: Left pending in committeeSponsor: Will Metcalf
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What This Bill Proposed
Texas HB 1508 fully repeals Chapter 171 of the Tax Code, eliminating the state for taxable entities starting January 1, 2026. Businesses subject to the tax on December 31, 2025, are exempt from filing reports or paying tax on for that period. Prior tax liabilities, audits, deficiencies, and ongoing enforcement actions remain subject to previous laws until barred by limitations.
Eliminates a recurring state tax liability for corporations and other taxable entities operating in Texas, while preserving the state's authority to audit past tax periods and pursue existing legal penalties.
- The Texas franchise tax is a privilege tax imposed on each taxable entity chartered or organized in Texas or doing business in the state. context
Who It Would Have Affected
Groups the bill's text would have affected, as described in the record. Being affected is not a position for or against it.
Taxable entities
Taxable entities are relieved from filing franchise tax reports and paying taxes on taxable margins starting January 1, 2026.
Comptroller of Public Accounts
The comptroller retains authority to handle audits, deficiencies, redeterminations, refunds, and enforcement actions for pre-repeal tax periods.
Key Facts
You don't have to trust us. Each fact below is taken straight from the official document - click any one to see the exact passage, highlighted in the original.
Frequently Asked Questions
Do businesses still have to pay franchise tax for the period ending December 31, 2025?
Does the repeal wipe out past audits or pending tax enforcement actions?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
This bill did not become law - Died at adjournment · in House committee.
Procedural history
7 actions- Apr 28, 2025HouseLeft pending in committee
- Apr 28, 2025HouseTestimony taken/registration(s) recorded in committee
- Apr 28, 2025HouseConsidered in public hearing
- Apr 28, 2025HouseScheduled for public hearing on . . .
- Mar 12, 2025HouseCommitteeReferred to Ways & Means
- Mar 12, 2025HouseIntroducedRead first time
Show 1 earlier action
- Dec 4, 2024HouseIntroducedFiled
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Complete Elimination of Franchise Tax
The measure transitions Texas away from using Chapter 171 franchise taxes while establishing clear transitional rules for past liabilities and enforcement.
Sources
capitol.texas.gov
Analysis Score
0–100- Significance20Lowered because this bill did not pass (its text scored 80)
- Controversy60Intensity of disagreement among stakeholders
- Entertainment5Compellingness for a non-policy-wonk reader
- Buzz65Current news / social attention level
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