| 1 | 1 | | 81R1097 KLA-D |
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| 2 | 2 | | By: Zerwas H.B. No. 277 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the franchise tax and alternative revenue sources and |
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| 8 | 8 | | spending priorities for this state. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. This Act may be cited as the Revenue Reform Act |
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| 11 | 11 | | of 2009. |
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| 12 | 12 | | SECTION 2. (a) Effective January 1, 2010, Section |
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| 13 | 13 | | 171.002(d), Tax Code, is amended to read as follows: |
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| 14 | 14 | | (d) A taxable entity is not required to pay any tax and is |
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| 15 | 15 | | not considered to owe any tax for a period if: |
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| 16 | 16 | | (1) the amount of tax computed for the taxable entity |
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| 17 | 17 | | is less than $1,000; or |
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| 18 | 18 | | (2) the amount of the taxable entity's total revenue |
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| 19 | 19 | | from its entire business is less than or equal to $600,000 |
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| 20 | 20 | | [$300,000] or the amount determined under Section 171.006 per |
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| 21 | 21 | | 12-month period on which margin is based. |
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| 22 | 22 | | (b) This section applies only to a report originally due on |
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| 23 | 23 | | or after January 1, 2010. |
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| 24 | 24 | | SECTION 3. (a) Effective January 1, 2011, Section |
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| 25 | 25 | | 171.002(d), Tax Code, is amended to read as follows: |
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| 26 | 26 | | (d) A taxable entity is not required to pay any tax and is |
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| 27 | 27 | | not considered to owe any tax for a period if: |
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| 28 | 28 | | (1) the amount of tax computed for the taxable entity |
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| 29 | 29 | | is less than $1,000; or |
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| 30 | 30 | | (2) the amount of the taxable entity's total revenue |
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| 31 | 31 | | from its entire business is less than or equal to $1 million |
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| 32 | 32 | | [$300,000] or the amount determined under Section 171.006 per |
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| 33 | 33 | | 12-month period on which margin is based. |
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| 34 | 34 | | (b) This section applies only to a report originally due on |
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| 35 | 35 | | or after January 1, 2011. |
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| 36 | 36 | | SECTION 4. (a) The comptroller of public accounts shall |
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| 37 | 37 | | conduct a comprehensive study that: |
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| 38 | 38 | | (1) analyzes and compares: |
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| 39 | 39 | | (A) the feasibility of implementing alternative |
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| 40 | 40 | | methods to the franchise tax imposed under Chapter 171, Tax Code, by |
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| 41 | 41 | | which revenue may be generated to address the needs of this state; |
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| 42 | 42 | | and |
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| 43 | 43 | | (B) the effectiveness of each of those methods in |
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| 44 | 44 | | generating sufficient revenue to address those needs; and |
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| 45 | 45 | | (2) prioritizes the revenue needs of this state and |
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| 46 | 46 | | identifies potential reductions in expenditures by this state. |
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| 47 | 47 | | (b) The comptroller of public accounts shall consider the |
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| 48 | 48 | | funding priorities and requirements established by the Texas |
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| 49 | 49 | | Constitution in prioritizing the revenue needs of this state as |
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| 50 | 50 | | required by Subsection (a)(2) of this section. |
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| 51 | 51 | | (c) The study conducted under Subsection (a) of this section |
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| 52 | 52 | | must include an analysis and comparison of the following |
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| 53 | 53 | | revenue-generating methods: |
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| 54 | 54 | | (1) imposing a transaction tax in this state; |
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| 55 | 55 | | (2) imposing a value-added tax in this state; |
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| 56 | 56 | | (3) eliminating exemptions from the sales and use tax |
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| 57 | 57 | | imposed under Chapter 151, Tax Code; |
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| 58 | 58 | | (4) increasing the rate of the sales and use tax |
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| 59 | 59 | | imposed under Chapter 151, Tax Code; |
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| 60 | 60 | | (5) imposing the sales and use tax under Chapter 151, |
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| 61 | 61 | | Tax Code, according to rate brackets, the applications of which |
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| 62 | 62 | | vary according to the sales price of a taxable item; |
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| 63 | 63 | | (6) imposing a business sales tax in this state in |
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| 64 | 64 | | addition to the sales and use tax imposed under Chapter 151, Tax |
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| 65 | 65 | | Code; and |
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| 66 | 66 | | (7) any other method the comptroller considers |
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| 67 | 67 | | potentially effective in addressing the revenue needs of this |
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| 68 | 68 | | state. |
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| 69 | 69 | | (d) Not later than November 1, 2010, the comptroller of |
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| 70 | 70 | | public accounts shall submit a report to the legislature regarding |
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| 71 | 71 | | the results of the study conducted under this section. The report |
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| 72 | 72 | | must: |
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| 73 | 73 | | (1) identify one or more revenue-generating methods |
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| 74 | 74 | | the comptroller determines would be most effective in meeting the |
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| 75 | 75 | | revenue needs of this state; |
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| 76 | 76 | | (2) include a description of any legislation necessary |
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| 77 | 77 | | to implement the methods identified under Subdivision (1) of this |
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| 78 | 78 | | subsection; and |
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| 79 | 79 | | (3) propose specific reductions in expenditures by |
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| 80 | 80 | | this state and any legislation necessary to implement those |
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| 81 | 81 | | reductions. |
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| 82 | 82 | | SECTION 5. Effective January 1, 2014, Chapter 171, Tax |
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| 83 | 83 | | Code, is repealed. |
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| 84 | 84 | | SECTION 6. Except as otherwise provided by this Act, this |
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| 85 | 85 | | Act takes effect September 1, 2009. |
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