Texas Governor Signs Franchise Tax Bill - BodyShop Business
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Texas Governor Signs Franchise Tax Bill

Independent body shops will now be in same retail trade category as dealership shops and taxed at same rate.

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The Texas Franchise Tax legislation, supported by the Automotive Service Association (ASA) and ASA-Texas, was included in Substitute House Bill 500, which recently passed the Texas legislature and has now been signed by Texas Gov. Rick Perry.

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Currently, automotive service and collision repair shops owned and operated by new or used car dealerships are taxed at half the rate used to tax independent automotive repair facilities doing identical work. The Texas state tax code classifies dealership sales as “retail” and allows their service and repair business to be included under that banner. Independent automotive repairers have not had the same opportunity.

The Texas Franchise Tax legislation, included in Substitute H.B. 500, states that “the activities classified as Industry Group 753 of the 1987 Standard Industrial Classification Manual published by the federal Office of Management and Budget fall under Retail Trade,” addressing the Texas inequity.

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