Relating to the classification of certain entities as primarily engaged in retail trade for purposes of the franchise tax.

This bill amends Texas' franchise tax code to clarify which business activities qualify as "retail trade" for tax classification purposes. It specifically adds several rental activities to the definition, including apparel rentals, tool/leisure equipment leasing, heavy construction equipment rentals, and industrial uniform/linen rentals, as classified under the 1987 federal Standard Industrial Classification Manual. Businesses engaged in these specific rental sectors will now be classified as primarily in retail trade for franchise tax reporting. The change applies only to tax reports due on or after January 1, 2027.