Texas House Bill HB2790

Texas 2009 - 81st Regular

Caption

Relating to franchise tax incentives for recycling.

Impact

The impact of HB2790 on state laws will be significant, as it introduces new financial incentives to mitigate the tax burden on businesses engaging in recycling initiatives. The bill allows for deductions in gross receipts related to sales of recycled products and provides a credit for capital investments in recycling equipment. Such measures may lead to enhanced practices around waste management and recycling, which could ultimately result in a reduction of landfill usage and promote a circular economy within the state of Texas.

Summary

House Bill 2790 proposes amendments to the Texas Tax Code to introduce franchise tax incentives specifically aimed at promoting recycling efforts by taxable entities. The bill defines key terms like 'recycled product' and 'solid waste' as per existing health and safety regulations, setting the foundation for new tax exclusions. Taxable entities can exclude revenue derived from sales of recycled products manufactured using waste that would otherwise be disposed of as solid waste. This aims to encourage businesses to engage in recycling activities rather than discarding materials, fostering environmental responsibility.

Contention

Despite the positive intentions behind HB2790, there could be contention regarding the eligibility requirements. Specifically, to claim these tax benefits, a taxable entity must not primarily engage in the sale of recycled products, raising questions about who can fully benefit from the incentives. Some critics may argue that the limitations on eligibility could restrict participation from potential contributors to the recycling economy, thereby undermining the bill's potential efficacy in fostering widespread recycling practices. Additionally, there may be concerns regarding the enforcement of compliance to ensure that the recycled products genuinely meet the defined criteria.