Comptroller updates franchise tax depreciation rules to match federal law

Acting Texas Comptroller Kelly Hancock announced Monday, Dec. 1, that Texas will immediately update its franchise tax depreciation rules, allowing businesses to use bonus depreciation in line with the federal One Big Beautiful Bill Act of 2025.

The move follows a review of state law, which confirmed that Texas franchise tax rules allow use of the current Internal Revenue Code for depreciation calculations rather than being tied to the 2007 code.

Previously, businesses were required to spread certain asset deductions over multiple years.