Texas House Bill HB3109

Texas 2013 - 83rd Regular

Caption

Relating to the E-Z computation and rate of the franchise tax and exempting the first $1 million from the total revenue of certain taxable entities.

Impact

The legislation is expected to have a considerable impact on state tax statutes by adjusting the franchise tax thresholds and introducing significant deductions for specific taxable entities. This could lead to an increase in the number of small businesses that would no longer owe franchise taxes, thereby enhancing business viability and economic development in Texas. Additionally, larger entities could experience changes in their tax obligations as a result of these new computing methodologies.

Summary

House Bill 3109 proposes modifications to the calculation and assessment of the franchise tax in Texas. The bill specifically introduces an exemption for the first $1 million of total revenue for certain taxable entities, aiming to alleviate the tax burden on smaller businesses. By implementing an E-Z computation method, the bill seeks to simplify the tax process for those with revenues under a certain threshold, making compliance easier and potentially encouraging business growth in the state.

Sentiment

Overall, the sentiment surrounding HB3109 appears to be mostly positive, especially among small business advocates who see it as a respite from the financial strain of taxation. However, some concerns may be raised by those who believe that tax reductions for certain entities could lead to lower overall state revenue. Supporters argue that the long-term benefits of promoting small business development will compensate for any short-term fiscal impacts.

Contention

Notable points of contention surrounding this bill may include the potential for reduced state revenue forecasts as smaller entities take advantage of the new tax exemptions. Critics could voice concerns that the legislation creates an uneven playing field, favoring smaller businesses over larger corporations that may not benefit from the same level of deductions. As the bill progresses through the legislative process, discussions about its long-term implications on both state finance and equitable taxation are likely to arise.