Senate Introduces a New Texas Franchise Tax

Senate Introduces a New Texas Franchise Tax

This is an important issue for all Texas medical practices practicing within an entity format (i.e. corporation, LLC, partnership, etc):

The Senate Finance Committee voted out a committee substitute for House Bill 3928, the margin tax technical corrections bill. The bill introduces a new .675 percent gross receipts tax as the Texas franchise tax and renames the current margin tax as the “Elective Franchise Tax.” Taxpayers may elect to pay the margin tax instead of the gross receipts tax. The bill also makes a number of changes to the margin tax, including lowering the percentage necessary for combined reporting from 80 percent to “more than 50 percent” and providing a sliding scale of tax discounts for small businesses with revenues between $300,000 and $900,000.
Read a Summary of the Bill.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.