Law softens 'tax cliff' for many small businesses

AUSTIN, Texas (AP) - 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.

The Austin American-Statesman repots 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.


Information from: Austin American-Statesman,

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