Texas Senate OKs Plan That May Phase Out Key Business Tax

The Texas Senate has approved a bill seeking to gradually phase out taxes levied on businesses during future legislative sessions -- when the state potentially has shaken off the oil price slump and seen its economy begin booming again.

Approved quickly and without debate Tuesday, the measure now heads to the state House.

Its sponsor, Flower Mound Republican Sen. Jane Nelson, said conservatives have long clamored for ending the so-called "franchise tax" on business, and that her proposal puts it on "a glide path" toward elimination.

The bill mandates cuts to the franchise tax during future budget cycles when Texas' economy is projected to grow by at least 5 percent.

Low oil prices means the state wouldn't qualify this year, but the proposal could have sweeping impacts on future budgets.

Copyright AP - Associated Press
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