From January to the end of May, the Texas legislature met in Austin to discuss and vote on new legislation for the state, some of which may directly impact you and your business. Here’s a breakdown of the most significant changes for business in 2021-2022.
Texas Tax Code 313
This law, part of the Texas Economic Development Act, offers substantial tax incentives to businesses looking to develop in Texas; it has been renewed for two years through the passage of House Bill 4242. Because Texas does not have a state income tax, property taxes tend to be higher than the national average to compensate. With the extension of Tax Code 313, businesses that agree to build in Texas and create new jobs can receive a 10-year limit on the taxable amount of their property for public schools’ maintenance and operations. This means businesses can enjoy a decade-long tax break if they meet specific qualifications.
This bill aims to encourage the creation of high-paying jobs and large-scale investments in the state.
Texas Tax Exemptions for Some Businesses
Business owners that use their personal property to produce income may be exempt from paying taxes on those items because of Senate Bill 1449. This law only applies to tangible items with a taxable value under $2,500. But for small businesses, this exemption can go a long way in a business’s growth and prosperity.
COVID Legislation in Texas
In April, Gov. Greg Abbott issued an executive order that banned state agencies or state-funded organizations from demanding proof of vaccination. Elements of this order were included in Senate Bill 968 and it has a big impact on business.
Businesses that require customers to be vaccinated could be prohibited from entering into certain state contracts, or potentially have their operations permits revoked. Gov. Abbott tweeted on May 31, after SB 968 passed, “Vaccine passports are now prohibited in the Lone Star State.” However, businesses still retain the right to screen customers for COVID and does not impact any federal employment laws.
SB 968 prohibits the state from limiting housing and commercial construction and other essential construction services during a state of disaster. On a related note, the passage of HB 1500 also redefined the definition of essential businesses which could operate during a lockdown to include gun stores and other stores that sell certain firearms, knives, and ammunition.
At Richards Rodriguez and Skeith, we can help your business address the shifting landscape of Texas legislation.