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SB 1477

Relating to a franchise tax credit for a taxable entity that participates in the federal electronic verification of employment authorization program.

89th Legislature (2025) Introduced by Bob Hall

Texas bill would offer state franchise tax credits to businesses that adopt E-Verify employment authorization checks, incentivizing workforce immigration compliance through financial reward.

Referred to Finance
#aliens(i0032) #comptrollerofpublicaccounts(v2608) #labor--general(i0500) #taxation--franchise(i0807) #taxation--general(i0815)
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Bill Summary · SB 1477

Legislative bill overview

SB 1477 would establish a state franchise tax credit for Texas businesses that participate in E-Verify, the federal employment verification system. The credit would incentivize private employers to voluntarily use the federal government's electronic immigration status verification program when hiring and maintaining their workforce.

Why is this important

E-Verify participation directly affects hiring practices and workforce compliance with federal immigration law. This bill uses tax incentives to encourage broader adoption of the verification system, potentially increasing employment of authorized workers while shifting some compliance burden to private employers rather than relying solely on federal enforcement.

Potential points of contention

  • Tax revenue impact: The fiscal cost to the state treasury from franchise tax credits depends on participation rates and could be significant if adoption is widespread among large employers
  • Effectiveness debate: Critics question whether tax credits effectively increase E-Verify use versus free, voluntary adoption, while supporters argue incentives accelerate compliance
  • Business compliance burden: Small businesses may face administrative costs implementing E-Verify even with tax credits, raising concerns about disproportionate impact on smaller employers
  • Federal versus state authority: Questions about whether states should incentivize federal immigration enforcement mechanisms or leave this to federal agencies

Compiled from official sources — confirm details with the bill’s official record.

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