May 2, 2013—Texas Franchise Tax Bill, Substitute House Bill 500, was recently placed on the state legislative calendar to be addressed soon.
Currently, automotive service repair 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.”
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.”
The Automotive Service Association (ASA) is urging its Texas members to support the bill and send a letter to their legislators urging them to support the bill.
“This legislation is critical in helping the independent repair shops of Texas by correcting the unfair taxation of independent repair shops throughout Texas,” said Charles Parker, executive director of ASA-Texas. “We are grateful to Rep. Allen Fletcher (TX-130) and Rep. Harvey Hilderbran (TX-53) for leading this fight for independent automotive repairers.”
