S.B. No. 2774 amends the Texas Tax Code to clarify the definition of "retail trade" for franchise tax purposes. The bill updates Section 171.0001(12) by adding new classifications of activities that fall under retail trade. Specifically, it includes heavy construction equipment rental or leasing activities classified as Industry 7353 and introduces a new category for activities involving the rental of industrial uniforms, garments, and linen supplies classified as Industry 7213 or 7218. The previous language that included "and" at the end of the list has been deleted to accommodate these changes.

The bill stipulates that it will apply only to reports originally due on or after its effective date of January 1, 2027. This legislative change aims to ensure that the classification of certain rental activities aligns with the updated standards set forth in the 1987 Standard Industrial Classification Manual published by the federal Office of Management and Budget.

Statutes affected:
Introduced: Tax Code 171.0001 (Tax Code 171)
Senate Committee Report: Tax Code 171.0001 (Tax Code 171)
Engrossed: Tax Code 171.0001 (Tax Code 171)
House Committee Report: Tax Code 171.0001 (Tax Code 171)
Enrolled: Tax Code 171.0001 (Tax Code 171)