Senate lawmakers in Texas have approved significant changes to the state's business tax and special education system. The Senate unanimously passed a measure that would provide substantial tax relief to businesses paying the franchise tax. This measure, part of a broader package that includes cuts to residential and business property tax rates, is encapsulated in Senate Bill 32. The bill aims to let businesses write off up to 20% of their inventory for tax purposes. According to Houston Senator Paul Bettencourt, "There are approximately 130,000 franchise tax filers – we think approximately 59 percent – that have a retail or cost-of-goods-sold deduction that may be able to benefit from the inventory tax credit."
The provision, funded by a $500 million appropriation in the Senate's version of the state budget, will benefit small business owners. If claims exceed the available funds, rebates will be pro-rated among applicants. Additionally, the exemption for business personal property tax would increase from $2,500 to $25,000, potentially promising $700 million in tax relief.
Alongside financial reforms, the Senate passed a significant bill to overhaul the state's special education system. Senate Bill 568 proposes a shift from a location-based funding model to one that focuses on actual services provided, affecting funding for around 775,000 children across Texas. Senator Bettencourt explained, "We’re making a transformative step for special education across the state."
The bill also seeks to alleviate initial evaluation costs for students potentially requiring special education, offering faster access to services and interventions. It proposes to enhance transportation funding for special education students and establish grants for teacher certification in dyslexia and autism education.
Conroe Senator Brandon Creighton, chair of the Education K-16 committee, emphasized the importance of SB 568 for Texas, stating that it's "the first time we’ve had a real roadmap to closing some of those funding gaps in a lasting way.” Bettencourt expressed hopes for further reforms to be developed by 2027 as the new model is adopted by schools.
