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Texas Franchise Bill Passes House

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May 10, 2013—The Texas Franchise Tax legislation, which was included in Substitute House Bill 500, recently passed the Texas House of Representatives.

The bill has been sent to the Texas state Senate for consideration.

Currently, automotive service 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.”

The 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.”

“We are not finished with our work on this issue, but we have come a long way and the Automotive Service Association [ASA] wants to thank Rep. Allen Fletcher (TX-130) and Rep. Harvey Hilderbran (TX-53) who have worked hard to ensure that independent repairers are treated fairly in the state of Texas,” said Charles Parker, executive director, ASA of Texas.

The ASA is urging its members to continue to encourage Texas senators to support this legislation by sending letters of approval.

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