Legislation introduced to cure Texas franchise law inequity

The Automotive Service Association (ASA) is concerned about inequities in the Texas Tax Code. Currently in the Texas Franchise Tax Code, automotive repair and collision shops owned and operated by new or used car dealerships are taxed at half the rate used to tax independently owned automotive repair businesses doing identical work. The tax code classifies dealership sales as “retail” and allows their service and repair business to be included under that banner. Texas independent repairers are seeking similar treatment.

Texas state Rep. Allen Fletcher, Texas-130, has filed a bill to classify the auto repair industry as “retail” for purposes of the franchise tax. This would make it so that repair shops would be taxed the same half-percent that dealers, parts stores and tire stores are now taxed. It is a major step in ASA’s effort to move forward with relief from this unfair tax on independent shops. This legislation does not address taxes in previous years.

ASA is asking Texas repairers to support House Bill 429 and to continue to contact their state legislators urging them to help stop further audits of the automotive service industry until this issue is resolved.

To view the letter to send to your legislator in support of this bill, visit ASA’s legislative website at www.TakingTheHill.com.