State Incentive

Franchise Tax

Summary

In Texas a company may deduct moving expenses from their apportioned margin while calculating their franchise liability if the company relocates its principal place of business from out of state to Texas.

Companies must relocate their principle place of business from out of State into Texas to obtain the deduction. A taxable entity may deduct relocation costs incurred in relocating the taxable entity’s main office or other principal place of business to this state from another state if the business meets the criteria in Texas Tax Code Section 171.109(b). The taxable entity must take the deduction on the entity’s first annual report described by Rule 3.584(c) (1)(C)(i).

The bill also makes permanent an exemption for businesses that gross less than $1 million in revenue while providing a $1 million deduction for businesses once they pass the gross receipts revenue threshold. The bill also amends the margin calculation accordingly for equity.

There are several ways for entities to earn franchise tax credits. Learn more about these options by selecting the links below. Note the expiration dates for each credit type.