HB 5181

relating to the minimum revenue calculation subject to the Texas
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 171.002, Tax Code, is amended to read as
Sec. 171.002.  RATES; COMPUTATION OF TAX.  (a) Subject to
Sections 171.003 and 171.1016 and except as provided by Subsection
(b), the rate of the franchise tax is 0.75 percent of taxable
(b)  Subject to Sections 171.003 and 171.1016, the rate of
the franchise tax is 0.375 percent of taxable margin for those
taxable entities primarily engaged in retail or wholesale trade.
(c)  A taxable entity is primarily engaged in retail or
(1)  the total revenue from its activities in retail or
wholesale trade is greater than the total revenue from its
activities in trades other than the retail and wholesale trades;
(2)  except as provided by Subsection (c-1), less than
50 percent of the total revenue from activities in retail or
wholesale trade comes from the sale of products it produces or
products produced by an entity that is part of an affiliated group
to which the taxable entity also belongs; and
(3)  the taxable entity does not provide retail or
wholesale utilities, including telecommunications services,
(c-1)  Subsection (c)(2) does not apply to total revenue from
activities in a retail trade described by Major Group 58 of the
Standard Industrial Classification Manual published by the federal
Office of Management and Budget.
(c-2)  For purposes of Subsection (c)(3), the provision of
telecommunications services does not include selling telephone
(d)  A taxable entity is not required to pay any tax and is
not considered to owe any tax for a period if:
(1)  the amount of tax computed for the taxable entity
(2)  the amount of the taxable entity's total revenue
from its entire business is less than or equal to [$2.47] $3.0
million or the amount determined under Section 171.006 per 12-month
period on which margin is based.
SECTION 2.  The changes in law made by this Act do not affect
tax liability accruing before the effective date of this Act.  That
liability continues in effect as if this Act had not been enacted ,
and the former law is continued in effect for the collection of
taxes due and for civil and criminal enforcement of the liability
SECTION 3.  This Act takes effect January 1, 2026.