Texas Senate Bill SJR52

Texas 2011 - 82nd Regular

• Refer: 4/14/11

Caption

Proposing a constitutional amendment clarifying that a tax imposed on certain business entities is not subject to Section 24, Article VIII, Texas Constitution, and imposing certain limitations on the computation of a tax imposed on a business entity.

Impact

If passed, SJR52 will influence the legal framework surrounding tax assessment for business entities organized under Texas law or its equivalents in other jurisdictions and countries. It introduces limitations on how taxes can be computed based on a business entity's taxable margin. This could lead to reduced tax burdens for businesses operating under liability protection structures, aligning state laws more closely with business interests and encouraging entrepreneurship within Texas.

Summary

SJR52 proposes a constitutional amendment aimed at clarifying the treatment of taxes imposed on specific business entities, particularly those established to provide liability protection for their owners. The proposed change explicitly states that such taxes shall not be subject to Section 24 of Article VIII of the Texas Constitution. This amendment seeks to redefine the scope of tax computation associated with these entities, potentially affecting how liability-protective business structures, like limited liability companies (LLCs), are taxed in Texas.

Sentiment

The sentiment surrounding SJR52 is likely mixed, especially among different stakeholders. Proponents, particularly from the business community and conservative lawmakers, may view this amendment as a necessary step towards fostering a more business-friendly environment in Texas. In contrast, opponents might argue that such changes could undermine fiscal stability or equitable taxation, thereby potentially favoring certain business entities at the expense of broader tax equity.

Contention

Some notable points of contention regarding SJR52 include the implications for public revenue generation and fairness in the tax system. Critics may raise concerns that by exempting certain business entities from standard tax measures, there could emerge a disparity in how different businesses are taxed, which might place an undue burden on non-protected entities. The debate will likely center on balancing the need for economic development while ensuring fairness and adequate funding for public services.