Income/Franchise:
Texas: New Law Requires Registered Securities Market Operators to Exclude Certain Transaction Rebate Payments from Franchise Tax Base
S.B. 1058, signed by gov. 5/13/25. Effective as of January 1, 2026, and applicable to franchise tax reports originally due on or after such date, newly signed legislation requires that a taxable entity qualifying as a “registered securities market operator” exclude from its total revenue in calculating its Texas franchise tax liability any transaction rebate payments made by the operator to a defined broker or dealer as part of a securities transaction. According to the accompanying bill notes, the legislation seeks to secure accurate tax treatment for entities operating in the securities market as “revenue often includes pass-through payments that do not reflect true income, particularly transaction rebate payments made to brokers or dealers as part of securities trades.” Please contact us with any questions.
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