Texas House Bill HB1945

Texas 2013 - 83rd Regular

Caption

Relating to the total revenue exemption for the franchise tax.

Impact

If enacted, HB 1945 would directly influence tax revenues as it raises the exemption threshold for the franchise tax. This change is anticipated to lighten the tax load on many businesses, particularly those whose revenues do not exceed the new limit. Proponents argue that this adjustment will promote entrepreneurship and economic activity, helping to stabilize and grow the small business sector in Texas. However, there are concerns that increasing the exemption could lead to a decrease in overall state revenues, as fewer businesses would contribute to the tax base.

Summary

House Bill 1945 proposes amendments to the Texas Tax Code concerning the franchise tax, specifically addressing a total revenue exemption. This bill aims to modify the threshold for the exemption to $2.5 million, allowing smaller businesses to be exempt from taxation, thus reducing their financial burden. By adjusting this threshold, the bill seeks to support the sustainability of small enterprises in Texas, especially in the context of encouraging economic growth and fostering a more favorable business environment.

Sentiment

Overall, the sentiment surrounding HB 1945 seems to align with positive economic intentions. Supporters of the bill highlight its potential for fostering small business growth by alleviating the tax burden, while opponents raise concerns about its long-term implications for state revenue and fiscal sustainability. The discussions reflect a broader tension between supporting small businesses through tax relief and the state's need to maintain adequate funding for public services.

Contention

A notable point of contention in the discussions around HB 1945 centers on the balance between providing tax relief and ensuring sufficient revenue for state-funded programs. Critics of the bill argue that increasing the exemption could result in significant revenue losses for the state, which may lead to reduced funding for essential public services. Conversely, proponents counter that the potential economic growth spurred by supporting small businesses will ultimately benefit the state through increased economic activity and job creation.