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Relating to the classification of certain entities as primarily engaged in retail trade for purposes of the franchise tax, the official text

Shown verbatim: the complete text as captured from the official page posted by the Texas Legislature, fetched 2026-08-29. Where this bill amends existing law, language marked for deletion in the official page appears here in brackets. This is the enrolled version. The official bill page.
S.B. No. 2774

AN ACT

relating to the classification of certain entities as primarily

engaged in retail trade for purposes of the franchise tax.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 171.0001(12), Tax Code, is amended to

read as follows:

(12) "Retail trade" means:

(A) the activities described in Division G of the

1987 Standard Industrial Classification Manual published by the

federal Office of Management and Budget;

(B) apparel rental activities classified as

Industry 5999 or 7299 of the 1987 Standard Industrial

Classification Manual published by the federal Office of Management

and Budget;

(C) the activities classified as Industry Group

753 of the 1987 Standard Industrial Classification Manual published

by the federal Office of Management and Budget;

(D) rental-purchase agreement activities

regulated by Chapter 92, Business & Commerce Code;

(E) activities involving the rental or leasing of

tools, party and event supplies, and furniture that are classified

as Industry 7359 of the 1987 Standard Industrial Classification

Manual published by the federal Office of Management and Budget;

[and]

(F) heavy construction equipment rental or

leasing activities classified as Industry 7353 of the 1987 Standard

Industrial Classification Manual published by the federal Office of

Management and Budget; and

(G) activities involving the rental of

industrial uniforms, industrial garments, and industrial linen

supplies that are classified as Industry 7213 or 7218 of the 1987

Standard Industrial Classification Manual published by the federal

Office of Management and Budget.

SECTION 2. This Act applies only to a report originally due

on or after the effective date of this Act.

SECTION 3. This Act takes effect January 1, 2027.

______________________________
______________________________

President of the Senate
Speaker of the House

I hereby certify that S.B. No. 2774 passed the Senate on

April 23, 2025, by the following vote: Yeas 28, Nays 3.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 2774 passed the House on

May 10, 2025, by the following vote: Yeas 127, Nays 0, two

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor
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