Texas House Bill HB1019

Texas 2009 - 81st Regular

Caption

Relating to the total revenue exemption for the franchise tax.

Impact

If enacted, HB1019 would significantly ease the tax obligations for many small businesses in Texas by increasing the exemption limit related to franchise taxes. This change would potentially allow a larger number of businesses to operate without the encumbrance of tax payments, allowing them to allocate more resources towards expansion, employment, and reinvestment within the local economy. Furthermore, the increase in the exemption threshold aims to stimulate economic activity by reducing the financial barriers for smaller enterprises.

Summary

House Bill 1019 aims to amend the Texas Tax Code regarding the franchise tax exemption threshold for taxable entities. The bill proposes an increase in the total revenue exemption from $300,000 to $1 million. This change is designed to relieve smaller businesses from the burden of paying franchise tax if their revenue falls below this threshold, thereby promoting economic growth among small enterprises in Texas.

Contention

The prospects of HB1019 have sparked discussions regarding its potential impact on state revenue. Critics of the bill express concerns that raising the exemption threshold may lead to a shortfall in state tax revenues, which could affect funding for essential programs and public services. Proponents argue that the economic stimulation from supporting small businesses could ultimately benefit the state’s economy, potentially compensating for any projected revenue losses. This divergence in opinions highlights a fundamental tension between fostering local economic growth and ensuring sufficient state funding.