Texas House Bill HB1668

Texas 2013 - 83rd Regular

Caption

Relating to a franchise tax credit for certain taxable entities that recruit new taxable entities to this state or that relocate to this state.

Impact

If enacted, HB 1668 would affect state laws by creating additional tax incentives aimed at enhancing Texas’ competitive edge as a business destination. The bill encourages existing businesses to extend their recruitment efforts to attract new business entities that are commuting into Texas, leading to potential job growth and economic stimulation within the state. The bill also establishes necessary oversight through the comptroller's office, which has the responsibility to regulate the allocation of credits and maintain accountability by requiring reports on job creation stemming from these tax incentives.

Summary

House Bill 1668 is designed to establish a franchise tax credit for taxable entities that engage in recruitment efforts to relocate new businesses to Texas. The bill outlines credits available to both certified 'sponsor' taxable entities and 'new' taxable entities, focusing on incentivizing businesses to create permanent, qualifying jobs within the state. Each credit is capped at $500 per job, with a maximum total of $3 million in credits available annually, facilitating a structured way to attract new businesses and bolster employment opportunities in Texas. The framework for the bill is based on rigorous definitions and qualifications for entities seeking the credit, including stipulations regarding the duration of operation outside Texas and the nature of recruitment efforts undertaken by sponsors.

Sentiment

The sentiment surrounding HB 1668 seems largely positive among supporters who view it as a critical strategy for economic development and job creation in Texas. Advocates argue that the bill would place Texas on a more favorable footing relative to other states also competing for business relocations. However, there may be pockets of concern among those who worry about the long-term implications of tax credits on state revenue, especially in light of the established cap on total credits.

Contention

Notable points of contention may arise regarding the administration and potential impact of the credits, particularly surrounding the fairness of facilitating credits for entities that may not necessarily contribute to the community in the same robust way as established businesses. Critics might argue that such incentives could disproportionately benefit larger entities at the expense of smaller, local businesses. Furthermore, there's an ongoing debate about how effective tax credits can be in stimulating real job growth versus simply rewarding business migration, calling into question the criteria for what constitutes a 'qualifying job' in the context of this bill.