Texas House Bill HB1596

Texas 2013 - 83rd Regular

Caption

Relating to the exclusion of certain flow-through funds by taxable entities engaged in the business of transporting barite in determining total revenue for purposes of the franchise tax.

Impact

The bill implies significant changes to how the franchise tax is applied to those involved in barite transportation in Texas. By excluding flow-through funds from revenue assessments, the legislation aims to alleviate some of the financial burdens on companies operating in an industry that is crucial to oil and gas exploration. As a result, businesses in this sector may experience increased profitability, as their taxable revenue would be calculated on a lower basis. This could encourage more investment and operational expansion within the barite transport industry.

Summary

House Bill 1596 pertains to the taxation of entities engaged in transporting barite, specifically allowing them to exclude certain flow-through funds from their total revenue calculations for the purposes of franchise tax assessments. This adjustment primarily benefits taxable entities within the barite transport sector by potentially lowering their taxable revenues, as it allows for the exclusion of subcontracting payments made to nonemployee agents that provide transportation services.

Contention

While the bill seems to promise economic benefits for the mineral transportation sector, it may also raise concerns regarding tax equity and fairness. Opponents might argue that by providing such exclusions specifically to barite transporters, there is a potential for unequal treatment among different sectors of the economy. This could lead to calls for similar tax considerations for other specific industries, thereby complicating tax legislation further. Additionally, there may be discussions about the implications this bill has on overall state revenue and whether it may lead to funding shortfalls in other essential areas due to the decreased tax intake.