Texas Senate Bill SB1944

Texas 2009 - 81st Regular

Caption

Relating to a franchise tax credit for charitable contributions made toward certain low-income residential housing programs.

Impact

The impact of SB1944 on state laws is primarily through its amendment of Chapter 171 of the Tax Code. It establishes a framework where eligible taxable entities can reduce their franchise tax liability as a result of their contributions to relevant housing programs. This initiative not only represents an attempt to alleviate financial burdens for non-profits involved in housing but also aims to improve living conditions for low-income residents by fostering more affordable housing projects. The bill sets specific limitations on the credit amount, both per project and annually, which ensures that the benefits are distributed effectively without excessive strain on the state’s tax revenue.

Summary

SB1944 is a proposed act aimed at creating a franchise tax credit for taxable entities that make charitable contributions towards certain low-income residential housing programs. The act seeks to encourage private sector investments in non-profit housing initiatives by providing tax relief. Specifically, it introduces a new subchapter in the Tax Code that outlines the eligibility for tax credits associated with donations to certified nonprofit owner-builder housing programs, which are designed to assist with the construction, remodeling, improvement, or rehabilitation of affordable residential housing.

Contention

Notable points of contention surrounding SB1944 may arise from how effectively the bill incentivizes charitable contributions compared to its fiscal implications. Some stakeholders might argue that while tax credits like these can stimulate housing initiatives, there could also be concerns about the verification processes necessary for determining compliance with eligibility for the credit. Potential transparency issues may surface, as entities seeking tax credits may face scrutiny regarding the nature of their contributions and their direct benefits to low-income communities. Moreover, advocates for affordable housing could voice questions about the effectiveness of relying on tax incentives as a sustainable solution for addressing housing needs.