WeVote
Log In

Bill

Bill

HB 1508

Relating to the repeal of the franchise tax.

89th Legislature (2025) Introduced by Will Metcalf

HB 1508 repeals Texas's $4-5 billion annual franchise tax on business revenues, requiring alternative revenue sources or state spending reductions to maintain current service levels.

Left pending in committee
#taxation--franchise(i0807)
0
WeVote Research Nonpartisan
Bill Summary · HB 1508

Legislative bill overview

HB 1508 proposes to repeal Texas's franchise tax, a tax levied on businesses' net revenues or capital. The bill would eliminate this tax entirely, removing a significant source of state revenue that currently funds education, infrastructure, and other state services.

Why is this important

The franchise tax generates approximately $4-5 billion annually for the Texas state budget. Its repeal would create a substantial fiscal gap requiring either alternative revenue sources, spending cuts, or both. This directly affects funding for public schools, higher education, healthcare, and state operations.

Potential points of contention

  • Revenue replacement: Without identifying alternative funding sources, repeal could force cuts to education and services or require new taxes elsewhere
  • Business impact variation: Large corporations benefit more from repeal than small businesses, raising equity concerns about who bears the actual tax burden shift
  • State budget constraints: Texas already faces competing demands on limited revenue; eliminating a major tax source could limit flexibility for emergency spending or economic downturns
  • Economic competitiveness claims vs. reality: While proponents argue it attracts business, Texas's business climate depends on many factors beyond tax rates, and other states attract investment without franchise tax repeal

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

Sign in to ask a question.