AUSTIN — The Senate has approved HB 7, sponsored by State Senator Jane Nelson, R-Flower Mound, to protect businesses from a major increase in unemployment taxes amid the pandemic. The bill now moves to the Governor's desk.
"Employers should not be punished for layoffs that occurred because of the economic downturn caused by the pandemic," Senator Nelson said. "At a time when our businesses are working so hard to reopen and rehire, we cannot allow them to face a dramatic tax increase, and HB 7 will prevent that from happening."
Texas businesses pay an unemployment insurance tax that is deposited into the Unemployment Compensation Trust Fund. The tax is recalculated annually based on the number of layoffs that have occurred. HB 7 exempts disaster-related unemployment from the calculation, which will give the state more time to consider ways to address the Unemployment Compensation Trust Fund, which was depleted in June.
Also heading to the Governor's desk is HB 1195, co-sponsored by Senator Nelson, to exempt federal Paycheck Protection Program (PPP) loans from being counted as profits under the state's franchise tax. These loans were provided under the federal Coronavirus Aid, Relief, and Economic and Security Act.
"These loans provided a lifeline to Texas businesses, and it would be unconscionable to impose a state tax on them," Senator Nelson said.
SENATOR JANE NELSON represents District 12,including portions of Tarrant and Denton Counties. She is Chairman of the Senate Finance Committee and the highest-ranking Republican in the Texas Senate.
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