Finance Committee advances R&D credit and aviation exemptions; several tax bills left pending

The Senate Committee on Finance on May 20, 2025, advanced several bills and heard testimony on a range of tax and policy proposals, including an extension and restructure of the state research-and-development tax incentive, an exemption for some general‑aviation maintenance parts, and a pilot tax credit to encourage private donations to family‑strengthening nonprofits. Committee members voted to report multiple measures favorably to the full Senate and left other measures pending for further work.

The most prominent item was Senate Bill 2206, which would extend and revise the state R&D tax incentive by tying the franchise tax credit more closely to the federal R&D credit (Internal Revenue Code §41) and by changing the program’s administration. Proponents from business and higher‑education organizations told the committee the change would make Texas more competitive for R&D projects and simplify administration. Witnesses included Jennifer Rabe of the Texas Taxpayers and Research Association, Tony Bennett of the Texas Association of Manufacturers, John Diamond of Rice University’s Baker Institute, and Glenn Hamer of the Texas Association of Business. The committee voted to report SB 2206 favorably to the full Senate (10 ayes, 0 nays).

The panel also reported Senate Bill 1030, which would exempt certain aircraft parts used in maintenance, repair and overhaul (MRO) for general aviation aircraft from sales and use tax. Industry witnesses and local airport representatives said neighboring…