The bill, H.B. No. 3547, proposes an exemption from the franchise tax for certain qualified space companies in Texas. It introduces a new section, 171.089, to the Tax Code, defining a "qualified space company" as a business entity primarily engaged in the research, development, manufacturing, testing, or launching of satellites, spacecraft, space vehicles, or related technologies from locations within the state. The bill also provides definitions for key terms such as "satellite," "spacecraft," and "space vehicle," which outline the scope of activities and technologies that qualify for the exemption.

The exemption from the franchise tax is specifically applicable to qualified space companies and will take effect on January 1, 2026, applying only to reports originally due on or after that date. This legislative change aims to support and promote the growth of the space industry in Texas by reducing the tax burden on companies involved in space-related activities.

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