TX HB4393

Creates a new franchise tax credit (Subchapter T) for qualified research and development expenses conducted in Texas, with a base credit rate of 8.722% of expenses exceeding 50% of the three-year average, or 10.903% if the entity contracts with public or private institutions of higher education

Entities with no R&D expenses in prior years receive a reduced credit rate of 4.361% (or 5.451% with higher education contracts) of current-year qualified expenses

Allows unused credits to be carried forward for up to 20 consecutive reports, with total credits capped at 50% of tax due per report; taxable entities that owe no franchise tax may receive the credit as a refundable payment

Repeals the existing sales and use tax exemption for R&D equipment (Section 151.3182) and the current R&D franchise tax credit (Subchapter M), while preserving previously accrued carryforward credits

Requires the comptroller to deposit franchise tax revenue to the property tax relief fund sufficient to offset any decrease caused by the new credits, and to report credit usage estimates to the legislature before each regular session; effective January 1, 2026