Texas House Bill HB2485

Texas 2009 - 81st Regular

Caption

Relating to the inclusion of gas and electric transmission and distribution costs in the cost of goods sold for purposes of the franchise tax.

Impact

The introduction of HB 2485 may lead to significant changes in how businesses within the energy sector report their costs and revenues. Notably, by allowing the inclusion of transmission and distribution costs as deductible expenses, this bill could reduce the overall tax burden for entities engaged in the sale of electricity and natural gas. This change may incentivize businesses to invest more in infrastructure, ultimately enhancing the reliability and efficiency of utility services provided to consumers.

Summary

House Bill 2485 addresses the inclusion of gas and electric transmission and distribution costs in the cost of goods sold for calculating franchise tax in Texas. The bill aims to amend certain sections of the Tax Code to allow businesses in the energy sector to include these specific costs in their tax calculations. By expanding the definition of costs directly related to goods sold, the bill focuses on leveling the financial playing field for stakeholders in the electricity and natural gas markets, thereby fostering a more competitive business environment.

Contention

One of the notable points of contention surrounding HB 2485 is its potential impact on state revenues. Opponents may argue that allowing these additional deductions could lead to a decrease in tax revenue collected from the franchise tax, which funds various public services and initiatives. Proponents, on the other hand, contend that the bill will stimulate growth in the energy sector and potentially lead to greater revenue through increased economic activity. This dual perspective reflects broader debates around taxation and regulation within the state.