Relating to the method of computing the franchise tax and the rates of the tax.
Impact
The implications of HB1036 on state laws are significant as it seeks to refine the franchise tax system, potentially affecting revenue collection from corporations operating in Texas. The modifications to the franchise tax structure may lead to an adjusted financial liability for many entities, thus influencing their operational and reporting strategies. This could cause a ripple effect in business practices across various sectors, as companies will have to adapt to the new regulations and tax obligations.
Summary
House Bill 1036 proposes changes to the method of computing the franchise tax and adjusts the tax rates applicable to corporations and limited liability companies doing business in Texas. The bill outlines the framework for determining taxable capital and taxable earned surplus for corporations, emphasizing how gross receipts from various business activities are to be reported and taxed. It introduces changes in the definitions related to taxable entities and expands the conditions under which tax deductions can be applied, particularly for renewable energy initiatives.
Contention
Notable points of contention surrounding the bill include concerns from small business advocates about the financial impact of the changes, particularly regarding the increased complexity in tax computation. Critics argue that while the bill aims to streamline processes, it may inadvertently place a heavier burden on smaller corporations that lack the resources to efficiently navigate and comply with the updated tax calculations. Furthermore, the extent of deductions available for renewable energy projects has spurred discussions regarding environmental policy and economic responsibilities, with stakeholders advocating for clear guidelines to prevent misuse.
Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.
Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.
Relating to providing property tax relief through the public school finance system, exemptions, and limitations on taxes and providing franchise tax relief.
Relating to providing property tax relief through the public school finance system, exemptions, and limitations on taxes and providing franchise tax relief.
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the production of income and a franchise tax credit for the payment of certain related ad valorem taxes.
Relating to the franchise tax; changing the manner in which the franchise tax is computed and the rate of the tax; authorizing a filing fee; repealing the fee for failing to timely file a report.
Relating to the creation of research technology corporations for the development and commercialization of technologies owned by institutions of higher education or by certain medical centers with members that are institutions of higher education; providing for tax exemptions; providing a penalty.
Relating to the creation of research technology corporations for the development and commercialization of technologies owned by institutions of higher education or by certain medical centers with members that are institutions of higher education; providing for tax exemptions; providing a penalty.
Relating to the creation of research technology corporations for the development and commercialization of technologies owned by institutions of higher education or by certain medical centers with members that are institutions of higher education; providing for tax exemptions; providing a penalty.
Relating to exemptions from ad valorem taxes, the sales and use tax, and the franchise tax for certain businesses during an initial period of operation in this state.
Relating to an exemption from the franchise tax and certain filing fees for certain businesses owned by veterans during an initial period of operation in the state.
Relating to an exemption from the franchise tax and certain filing fees for certain businesses owned by veterans during an initial period of operation in the state.