LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION April 16, 2009 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB4611 by Oliveira (Relating to the treatment of proceeds from sales of certain loans and securities for purposes of apportionment under the franchise tax.), Committee Report 1st House, Substituted No fiscal implication to the State is anticipated. The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, in relation to determining receipts arising from the sale of a loan or security for the purpose of apportioning margin. Under current law in Section 171.106(f), if a loan or security is treated as inventory by the seller for federal income tax purposes, the gross proceeds of the sale of that loan or security are considered gross receipts for apportioning margin. Otherwise, gross receipts would be the gross proceeds from the sale minus the basis of the loan or security. The bill would add a provision stating that a lending institution could use the gross proceeds of the sale of a loan or security as gross receipts if the loan or security were categorized as "Securities Available for Sale" or "Trading Securities" under Financial Accounting Standard No. 115. The bill would take effect on January 1, 2010, and apply to a report due on or after that date. The bill would limit the use of Financial Accounting Standard No. 115 to taxable entities that are lending institutions. The change made by the bill conforms to the expected scope of the use of gross proceeds from the sale of a loan or security that was anticipated under the provisions of HB 3928 as passed by the 80th Legislature, Regular Session (2007). Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies:304 Comptroller of Public Accounts LBB Staff: JOB, MN, SD, SM
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
April 16, 2009
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB4611 by Oliveira (Relating to the treatment of proceeds from sales of certain loans and securities for purposes of apportionment under the franchise tax.), Committee Report 1st House, Substituted
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB4611 by Oliveira (Relating to the treatment of proceeds from sales of certain loans and securities for purposes of apportionment under the franchise tax.), Committee Report 1st House, Substituted
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB4611 by Oliveira (Relating to the treatment of proceeds from sales of certain loans and securities for purposes of apportionment under the franchise tax.), Committee Report 1st House, Substituted
HB4611 by Oliveira (Relating to the treatment of proceeds from sales of certain loans and securities for purposes of apportionment under the franchise tax.), Committee Report 1st House, Substituted
No fiscal implication to the State is anticipated.
No fiscal implication to the State is anticipated.
The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, in relation to determining receipts arising from the sale of a loan or security for the purpose of apportioning margin. Under current law in Section 171.106(f), if a loan or security is treated as inventory by the seller for federal income tax purposes, the gross proceeds of the sale of that loan or security are considered gross receipts for apportioning margin. Otherwise, gross receipts would be the gross proceeds from the sale minus the basis of the loan or security. The bill would add a provision stating that a lending institution could use the gross proceeds of the sale of a loan or security as gross receipts if the loan or security were categorized as "Securities Available for Sale" or "Trading Securities" under Financial Accounting Standard No. 115. The bill would take effect on January 1, 2010, and apply to a report due on or after that date. The bill would limit the use of Financial Accounting Standard No. 115 to taxable entities that are lending institutions. The change made by the bill conforms to the expected scope of the use of gross proceeds from the sale of a loan or security that was anticipated under the provisions of HB 3928 as passed by the 80th Legislature, Regular Session (2007).
The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, in relation to determining receipts arising from the sale of a loan or security for the purpose of apportioning margin.
Under current law in Section 171.106(f), if a loan or security is treated as inventory by the seller for federal income tax purposes, the gross proceeds of the sale of that loan or security are considered gross receipts for apportioning margin. Otherwise, gross receipts would be the gross proceeds from the sale minus the basis of the loan or security. The bill would add a provision stating that a lending institution could use the gross proceeds of the sale of a loan or security as gross receipts if the loan or security were categorized as "Securities Available for Sale" or "Trading Securities" under Financial Accounting Standard No. 115.
The bill would take effect on January 1, 2010, and apply to a report due on or after that date.
The bill would limit the use of Financial Accounting Standard No. 115 to taxable entities that are lending institutions. The change made by the bill conforms to the expected scope of the use of gross proceeds from the sale of a loan or security that was anticipated under the provisions of HB 3928 as passed by the 80th Legislature, Regular Session (2007).
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, MN, SD, SM
JOB, MN, SD, SM