Texas Senate Bill SB818

Texas 2009 - 81st Regular

Caption

Relating to the exclusion of certain payments from the total revenue of certain taxable entities for purposes of the franchise tax.

Impact

The implementation of SB818 would primarily affect the franchise tax obligations of qualified destination management companies in Texas. By permitting these entities to exclude certain revenues from their taxable total, the bill is expected to provide financial relief and promote growth within the destination management sector. This could potentially encourage service businesses to expand their operations, boosting economic activity linked to tourism and event planning in the state.

Summary

SB818 is a bill that amends the Texas Tax Code, specifically focusing on the treatment of taxable entities that operate as destination management companies for franchise tax purposes. The bill allows qualified destination management companies to exclude specific payments made for services, labor, or materials related to their destination management services from their total revenue calculations. This exclusion is aimed at reducing the tax burden on these companies, which often operate within the service and event planning industries.

Contention

There may be points of contention regarding the classification of what constitutes a 'qualified destination management company.' Stakeholders might debate the criteria needed to qualify for revenue exclusions, particularly concerning the revenue threshold and the definitions of various destination management services. Furthermore, there could be discussions on whether such tax benefits create an uneven playing field among businesses in the service sector, as some companies might not meet the qualifications outlined in the bill, leading to lobbying efforts for equitable treatment across different segments of the industry.