Texas House Bill HB2391

Texas 2009 - 81st Regular

• Out of House Committee: 5/6/09

Caption

Relating to a franchise tax exclusion for contractual flow-through funds paid to certain performing artists.

Impact

If enacted, HB2391 would have significant implications for the state tax structure, particularly regarding how revenues from the entertainment sector are treated. It aims to promote growth within the industry by providing financial relief to artists and entities involved in producing live events. This exclusion would enable performing artists to retain a larger portion of the ticket sales revenue through contractual agreements, thus potentially leading to increased performances and cultural events in Texas.

Summary

House Bill 2391 seeks to create a franchise tax exclusion specifically for contractual flow-through funds that are paid to certain performing artists. The bill amends Section 171.1011 of the Tax Code to mandate that a taxable entity can exclude revenues designated by contract for performing acts or exhibitions when calculating their total revenue for tax purposes. This provision is intended to alleviate the tax burden on performing artists and the broader entertainment industry, enhancing their financial viability.

Contention

While the bill's intent appears to be supportive of the arts, it may face contention from various perspectives. Critics of tax exclusions often argue that they can reduce overall state revenue and contribute to budgetary constraints. Such fiscal concerns could lead to debates about equitable taxation practices, especially in comparison to other sectors that may not receive similar tax breaks. Additionally, the process of defining which artists or acts qualify under this framework may also face scrutiny, raising questions about fairness and transparency in the allocation of tax benefits.