Texas House Bill HB4611

Texas 2009 - 81st Regular

• Out of House Committee: 4/17/09
• Voted on by House: 5/2/09
• Out of Senate Committee: 5/23/09
• Voted on by Senate: 5/27/09
• Governor Action: 6/19/09
• Enrolled: 5/28/09
• Passed: 6/19/09

Caption

Relating to the treatment of proceeds from sales of certain loans and securities for purposes of apportionment under the franchise tax.

Impact

The enactment of HB 4611 will primarily affect entities engaged in the sale of loans and securities by simplifying how their transactions are categorized under the franchise tax. By explicitly defining gross proceeds in this context, the bill potentially reduces ambiguity in tax compliance for these businesses. It aligns state tax practices with federal guidelines and accepted accounting standards, thus offering a clearer framework for financial reporting and tax liability assessment.

Summary

House Bill 4611 relates to the treatment of proceeds from the sale of specific loans and securities for apportionment purposes under the franchise tax in Texas. The bill amends Section 171.106(f) of the Texas Tax Code, establishing that if a loan or security is regarded as inventory for federal income tax purposes or generally accepted accounting principles, the gross proceeds from its sale are considered gross receipts. This change aims to clarify tax treatment and ensure consistency for businesses dealing with such financial instruments.

Contention

While the text does not detail significant points of contention, the changes proposed in HB 4611 may prompt discussions regarding the implications of classifying loans and securities as inventory for tax purposes. Stakeholders in the financial services sector may debate the impact on reporting requirements and overall tax burdens, potentially leading to broader discussions on tax equity and regulatory compliance for financial transactions.