Texas for Innovation announced that a new economic impact study indicates extending the state's research and development (R&D) tax credit would enhance economic output, jobs, and income without burdening state or local finances. The announcement was made in a press release on March 13, 2025.
According to the study, extending Texas’ R&D tax credit could potentially create over 113,000 jobs and contribute $13.8 billion to the state’s Gross State Product (GSP) over the next decade. Texans for Innovation, a coalition of business and industry leaders, supports Senate Bill 2206 and House Bill 4393, which propose extending the franchise tax credit for qualified research expenses to encourage investment in innovation.
Currently, Texas ranks 33rd in R&D investment as a share of GSP, trailing behind leading states. The study suggests that expanding tax incentives could increase GSP by 0.13%, generate $8.5 billion in wages, and attract long-term investment. Initial costs are estimated at $661.4 million in fiscal year 2026; however, the study predicts that long-term economic benefits will offset these expenses with a projected $58.8 billion net gain over 20 years.
"For many industries like manufacturing, high-tech, energy, and biotechnology," said Tony Bennett, president and CEO of the Texas Association of Manufacturers. "The R&D process represents the critical ‘first phase.’ It’s where questions, ideas, and problems are fleshed out in labs, the field or production facilities to become the products and solutions that power the Texas economy." Bennett added that these industries drive Texas' economic growth and job creation and emphasized that "the state should be doing all it can to encourage growth in the sectors that are innovating the future of Texas." He expressed appreciation for Senator Bettencourt and Representative Geren's leadership in supporting this issue.
Texas for Innovation advocates strengthening the state's R&D tax structure to enhance competitiveness, support business growth, and attract high-quality jobs. Its membership includes a broad coalition of industry groups such as the Texas Association of Manufacturers; Texas Association of Business; Texas Healthcare and Bioscience Institute; Texas Taxpayers and Research Association; Texas Chemistry Council; Texas Oil & Gas Association; Texas Economic Development Council; major regional chambers; and companies like Lockheed Martin.
