Texas Senate Approves Major Tax Relief for Business Owners

Frisco

April 14, 2025 Maverick Tax Guardians

In a unanimous decision on April 9, 2025, the Texas Senate passed Senate Bill 32 (SB 32), a significant tax relief measure aimed at supporting business owners across the state. Authored by Senator Paul Bettencourt (R-Houston), the bill introduces two key provisions designed to alleviate the tax burden on businesses and stimulate economic growth.

Key Provisions of SB 32:

Increase in Business Personal Property Tax Exemption: SB 32 raises the exemption for business personal property from $2,500 to $25,000 per business location. This change means that businesses with personal property valued under $25,000 will no longer need to file renditions, simplifying the tax process and saving approximately $495 annually per location.
Introduction of Inventory Franchise Tax Credit: The bill establishes a 20% franchise tax credit for ad valorem taxes paid on inventory, capped at $500 million annually. This credit is expected to benefit up to 59% of Texas franchise taxpayers, providing substantial relief to businesses with significant inventory holdings.

Senator Bettencourt emphasized the bill’s potential impact, stating, “With SB 32 and SJR 81, we’re providing real tax relief to Texas businesses, especially small businesses, saving them nearly five hundred dollars and their time not filing out BPP renditions.”

Lieutenant Governor Dan Patrick also expressed strong support for the legislation, highlighting its role in reducing compliance costs and supporting economic growth. He noted that SB 32 is a priority for the Senate and anticipates swift action from the Texas House.

Next Steps:

Following its passage in the Senate, SB 32, along with its constitutional companion Senate Joint Resolution 81, will proceed to the Texas House for consideration. If approved, the measures will be presented to voters in November for final ratification. Upon voter approval, the new tax provisions are set to take effect on January 1, 2026.

This legislative move is part of a broader $3.5 billion tax relief initiative by the Texas Senate, aiming to provide meaningful financial relief to both homeowners and businesses. The passage of SB 32 marks a significant step towards a more favorable tax environment for Texas business owners.

Sources
This news article is based on information from:
Community Impact -“Texas Senate passes bill that would cut taxes for business owners” (April 11, 2025). Retrieved from:https://communityimpact.com/austin/south-central-austin/texas-legislature/2025/04/11/texas-senate-passes-bill-that-would-cut-taxes-for-business-owners/