New Texas laws include tax relief for small businesses, removing DEI offices

December 29, 2023

More than 30 Texas laws become effective Jan. 1, including tax relief for thousands of small businesses and changes to diversity, equity and inclusion (DEI) policies at public universities.

Among these laws, Senate Bill 3 increases the threshold that businesses are exempted from paying the state’s franchise tax from $1.235 million to $2.47 million. Affected businesses also will not have to file a No-Tax-Due franchise tax return, which will additionally save business owners’ time.

“This historic tax relief package removes 67,000 small businesses from paying the franchise tax all together so our businesses can continue to grow jobs and power the Texas economy forward,” Lt. Gov. Dan Patrick said in a statement issued in August after Gov. Greg Abbott signed the bill Aug. 9.

The fiscal impact of the tax savings is expected to cost the state about $300 million per year, according to the Legislative Budget Board’s analysis.

Also effective Jan. 1 is the outcome of SB 17, which prohibits colleges and universities from operating a DEI office, division or other unit for certain purposes. These new restrictions prohibit any such office from influencing hiring or employment practices, offering special treatment or benefits, promoting policies and conducting training related to race, sex, color or ethnicity. The intent behind the law is to prevent any practices that “are polarizing and work against the goal of inclusion,” according to the Senate Research Center.

The University of Texas System created a document in November to help institutions adhere to the new rules, including analyzing any existing DEI offices to ensure that they were not in violation of the new restrictions.

After SB 17 was signed, The University of Texas at Austin released a statement, saying, “There is little doubt that Senate Bill 17 will bring about changes. Rest assured, however, that UT Austin will continue to work within the law to ensure the campus continues to be a welcoming place for community members of various perspectives and experiences.”

Some institutions got a jumpstart on the new law. In August, the University of Houston closed its Center for Diversity and Inclusion and its LGBTQ Resource Center in response to SB 17. The institution pivoted to opening a new Center for Student Advocacy and Community division.

In November, voters approved 13 amendments to the Texas constitution, two of which go into effect Jan. 1. Proposition 8 creates a $1.5 billion broadband infrastructure fund to finance projects to connect 2.8 million Texans in rural or underserved communities with high-speed internet.

This new special fund can be used to expand, construct and operate broadband or telecommunications infrastructure to “close the digital divide in Texas, which in turn could help to improve quality of life and lead to increased economic growth.”

Proposition 14 set in motion a special fund that will create and improve state parks. The centennial parks conservation fund, named after the recent 100th anniversary of the state parks system, will provide a stable funding source to acquire land and develop new parks, protect the state’s natural resources and make them accessible to the public.

“Today marks the beginning of a new chapter for Texas State Parks thanks to the unwavering support from the Texans who voted to adopt Proposition 14,” said David Yoskowitz, executive director of the Texas Parks and Wildlife Department, in a statement after the Nov. 7 election. “This historic vote confirms the value Texans place on conserving outdoor spaces for the enjoyment of all Texans.”

All news and information on this site is provided by the team at Strategic Partnerships, Inc. Check out this short 1-minute video that provides a quick overview of how we work with clients.

Photo by Austin Distel on Unsplash

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