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Texas Governor Signs Franchise Bill

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June 18, 2013—Texas Gov. Rick Perry recently signed the Texas Franchise Tax legislation, which was included in the Substitute House Bill 500.

Currently, automotive service shops owned and operated by new or used car dealerships are taxed at half the rate used to tax independent automotive repair facilities.

The Texas state tax code classifies dealership sales, as well as their service and repair business, as “retail.”

The Texas Franchise Tax Bill addresses the inequity by stating that “the activities classified as Industry Group 753 of the 1987 Standard Industrial Classification Manual published by the federal Office of Management and Budget fall under retail trade.”

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