
Texas legislation enhances R&D franchise tax credit, repeals R&D sales and use tax exemption
Texas legislation sent to Governor Greg Abbott (R) on June 1 provides for an enhanced research and development (R&D) franchise tax credit.
The Trump administration’s implementation of “reciprocal tariffs” continues to be dynamic, prompting a challenging trade landscape for many multinational companies. The President signed an executive order on April 2, made announcements, and released memoranda on this matter. In summary, the new tariffs in place as of the date of this Insight include the following (this list does not reflect all previously existing tariffs):
A wider industry perspective can be found in PwC’s US Tariff Industry Analysis Tax Insight published on April 22 and additional information can be found in the US Customs and Border Protection (USCBP) tariff requirements. The administration recently noted that more than 100 countries wish to negotiate trade imbalances with a drive towards an economic level playing field and fair-trading system. As of the date of this Insight, no change in previously noted rates has been announced. Note: The UK-US trade agreement announced on May 8 includes significant adjustments to automotive tariffs. Under the agreement, US tariffs on British-made cars are reduced from 25% to 10% for up to 100,000 vehicles annually, effectively covering the UK's current export volume. In exchange, the UK is considering lowering its tariffs on US car imports from 10% to 2.5%, aligning with US rates on other trading partners. While the agreement marks progress in UK-US trade relations, further negotiations are expected and remain fluid.
The administration’s trade policies are prompting significant implications for companies operating in or trading with the United States, including companies within the Automotive industry. Many automotive companies currently utilize offshore or cross-border operations within their global footprint and supply chains. PwC’s Industry Analysis data reflects that the total tariff measures could increase from $8 billion to nearly $78 billion per year (with the implied average tariff rate increase from 2% to 18% on US imports), although that figure does not take into account countermeasures that trading partners may impose, or behavioral adjustments that companies may make, in reaction to US policy changes.
This Tax Insight serves as an update to our March 17 Industry Analysis, which previously included forecasted reciprocal tariff rates at that time. Note: PwC’s updated Industry Analysis utilizes the tariffs that have been implemented by the United States as of April 15 (based on guidance and specific factors explained in the next section) as well as potential tariffs on so-called Annex II products.
Multinational companies in the Automotive industry should evaluate how these trade policies affect their global business, including impacts on imports and exports and potential opportunities. Close coordination between procurement, supply chain, tax, and other C-suite leaders to formulate short, medium, and long-term strategies is critical, along with data-driven analysis. Advanced tools are available that companies can leverage using their US customs data to quantify the impact — often with unexpected results. This analysis can serve as a powerful foundation to identify “no-regret” actions and to help mitigate risks.
For more details, read the full Tax Insight linked below.
Texas legislation sent to Governor Greg Abbott (R) on June 1 provides for an enhanced research and development (R&D) franchise tax credit.
PwC's latest Tariff Industry Analysis examines President Trump's reciprocal tariffs and the mitigation strategies that companies are considering.
The IRS has issued Notice 2025-27, providing significant interim guidance on the application of the corporate alternative minimum tax (CAMT).
Budget-related tax legislation passed by the Illinois General Assembly on June 1 includes significant tax changes.