A long-discussed cut in state franchise taxes for as many as 40,000 small businesses was approved by the Texas Senate by a wide margin. Sen. Dan Patrick, R-Houston, the Senate sponsor of House Bill 4765, said the change will slash franchise taxes for businesses by as much as $172 million in the next two years. Under current law, companies making less than $300,000 in annual revenue are exempt from paying the state franchise tax. The bill would boost the exemption to $1 million for the next two years, taking about 40,000 businesses off the tax rolls. In 2008, a change in the state's franchise tax almost doubled the amount of the taxes collected. But Patrick said it was not spread equally across the business community, and businesses with total revenues between $1-10 million bore the brunt of the tax hike. "They paid an increase of almost 50 percent," Patrick said. The vote was 30-1, with Sen. Mario Gallegos, D-Houston, casting the lone no vote.

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