TX HB500

Establishes temporary reduced Texas franchise tax rates for 2014 (0.975% general / 0.4875% retail-wholesale) and 2015 (0.95% general / 0.475% retail-wholesale), with the 2015 reduction contingent on the comptroller certifying sufficient surplus state revenue to offset the loss.

Expands the definition of "retail trade" for franchise tax purposes to include auto exhaust repair shops (Industry Group 753), rental-purchase agreements, tool/party/furniture rentals (Industry 7359), and heavy construction equipment rental/leasing (Industry 7353).

Creates multiple new total revenue exclusions from the franchise tax base, including actual costs paid for vaccines, subcontracting payments by aggregate/barite transporters and landman services firms, pharmacy network reimbursements, direct costs of waterway transportation services, and flow-through taxes/fees for registered motor carriers.

Adds a new $1 million deduction alternative when computing taxable margin, allowing entities to subtract the greater of $1 million or their elected cost of goods sold/compensation deduction, and creates new franchise tax exemptions for political subdivision corporations and certain nonadmitted insurance organizations.

Creates a transferable franchise tax credit (effective January 1, 2015) of up to 25% of eligible costs for certified rehabilitation of certified historic structures, with a five-year carryforward period, sale/assignment provisions, and certification required from the Texas Historical Commission.