Law softens 'tax cliff' for many small businesses

Law softens 'tax cliff' for many small businesses

Law softens 'tax cliff' for many small businesses

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by Associated Press

kvue.com

Posted on January 12, 2014 at 2:41 PM

Updated Sunday, Jan 12 at 2:46 PM

AUSTIN -- As many as 26,000 companies statewide -- or almost one in four across Texas -- will see tax savings this year thanks to a major new deduction passed by the Legislature.
 

Our partners at The Austin American Statesman reports the law approved last year softens what small business owners used to call "the cliff" for the franchise, or business margins, tax.

Since 2006, earning anything over $1 million in gross annual receipts suddenly meant a tax bill for businesses that shot from zero to thousands of dollars.

Now, the cliff has become something of a slope. Businesses making between $1 million and $3.3 million in gross receipts in 2014 will face a more gradual tax bill.

But critics note that the change will mean less state revenue for things like public schools.
 

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