As heavy rain and flooding plague the Houston area, Texas is preparing to have its first tax-free weekend for emergency supplies.

The first of its kind, Texas has just passed new legislation for a sales tax holiday for emergency preparation supplies. According to Chris Bryan, spokesperson for the Texas Comptroller of Public Account, “There’s a new sales tax holiday it’s called the Emergency Preparation Supplies sales tax holiday. It is really geared toward emergency supplies and this time of year, we’re starting to see some extreme weather coming into the Texas area.”

The details of the tax are:

• It starts at 12:01AM on April 23rd and runs through midnight on April 25th.
• No limits have been placed on the number of qualifying items you can buy.
• Some qualifying items are flashlights, batteries, first aid kits, radios and even some bigger ticket items, such as portable generators and emergency ladders.
• Non-qualifying items include chainsaws, camping supplies and batteries for motorized vehicles.
• No certificates or coupons are necessary. You just don’t get charged sales tax at the checkout counter or online.

In addition to this new sales tax, Texas also has an Energy Star sales tax holiday on Memorial Day weekend (May 28-30) for energy-efficient air conditioners, refrigerators, clothes washers and the like. However, the most notable tax break is the Sales Tax Holiday, which runs from Aug. 5 – 7. As in previous years, the law exempts most clothing, footwear, school supplies and backpacks priced under $100 from sales and use taxes, which save shoppers approximately $8 on every $100 they spend.

When evaluating state tax policies, Texas has long been considered one of the most tax-friendly states. This point, combined with the fact that last year Texas was positioned in the top ten states for business, makes the environment for business in Texas particularly enticing. The tax options available for research and development (R&D), in particular, is one of the most generous and helpful taxes available for businesses in Texas. To elaborate, in order to achieve a benefit from R&D in Texas, the taxpayer must elect one of two tax options to which the R&D credit will be applied. Either the Texas franchise tax (up to a 50% cap) or exemption from the sales and use tax. Furthermore, much of the work done on a federal R&D tax credit return applies to a Texas return, so claimants can essentially get two tax credits for one tax workup.

Swanson Reed is a specialist R&D tax firm and has helped many clients across a diverse range of industries. Contact us for more information on how we can advance your company’s market value and boost its bottom line through the Research and Development Tax Credit.