Relating to the total revenue exemption for the franchise tax.
Impact
The proposed amendments to the tax code aim to foster greater economic development by reducing the financial strain on smaller, new, and emerging businesses. By increasing the revenue exemption, supporters argue that more businesses will be incentivized to invest in their operations, hire employees, and contribute to the state's economy without the challenge of immediate tax obligations. This shift is anticipated to create a more favorable business climate and encourage entrepreneurship, thus supporting job creation within the state.
Summary
SB193 seeks to amend existing franchise tax provisions in Texas by changing the total revenue exemption thresholds for taxable entities. Specifically, it raises the revenue threshold from $300,000 to $1 million, meaning that businesses with revenues below this amount would not be subject to a franchise tax. This change is designed to alleviate the tax burden on smaller businesses, allowing them to retain more capital for growth and operations. The bill is structured to apply only to reports originally due on or after the effective date of the legislation, which is January 1, 2010.
Contention
While proponents highlight the benefits of supporting small businesses through tax exemptions, there are concerns regarding potential revenue losses to the state. Critics argue that raising the exemption threshold could result in insufficient funding for public services, which are often supported by tax revenues. The debate centers on finding a balance between supporting small businesses and ensuring adequate public funding for essential services. Moreover, questions arise about whether this change might lead to large businesses restructuring as smaller entities to benefit from the tax exemption.
Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.
Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.
Relating to providing property tax relief through the public school finance system, exemptions, and limitations on taxes and providing franchise tax relief.
Relating to providing property tax relief through the public school finance system, exemptions, and limitations on taxes and providing franchise tax relief.
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the production of income and a franchise tax credit for the payment of certain related ad valorem taxes.
Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.
Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.
Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.
Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.