TX HB5181

Raises the minimum total revenue threshold for Texas Franchise Tax exemption from $2.47 million to $3.0 million per 12-month period, meaning businesses with revenue at or below this amount owe no franchise tax

Maintains the existing franchise tax rate of 0.75% of taxable margin for most businesses, with a reduced rate of 0.375% for entities primarily engaged in retail or wholesale trade

Preserves the existing exemption for taxable entities whose computed tax amount is less than $1,000

Does not affect tax liability that accrued before the effective date; former law continues to apply for collection and enforcement of previously accrued taxes

Takes effect January 1, 2026