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Texas Franchise Bill Placed on Legislative Calendar

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May 2, 2013—Texas Franchise Tax Bill, Substitute House Bill 500, was recently placed on the state’s legislative calendar and could be addressed soon, according to the Automotive Service Association (ASA).

The bill is in reference to tax rates of dealership and independent repair facilities. Currently, automotive repair shops operated by new or used car dealerships are taxed at half the rate compared to independent repair facilities that perform the same work.

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, “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 ASA is urging its Texas members to support the bill and send letters to their legislators expressing support.

“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, who recently testified on the issue on behalf of ASA. “We are grateful to Rep. Allen Fletcher (TX-130) and Rep. Harvey Hilderbran (TX-53) for leading this fight for independent automotive repairers.”

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