Texas House Bill HB2943

Texas 2013 - 83rd Regular

Caption

Relating to a sales and use tax exemption and a franchise tax credit related to certain research and development activities of entities in the aerospace industry.

Impact

If enacted, this bill would create significant alterations to the existing tax code, particularly Chapter 151 and Chapter 171 of the Texas Tax Code. Businesses primarily involved in the aerospace industry and conducting qualified research would benefit from reduced tax burdens. The sales and use tax exemption provides companies with incentives to invest in R&D, while the franchise tax credit serves as a direct financial benefit that can improve profitability and drive more funds towards future innovations.

Summary

House Bill 2943 aims to promote activities within the aerospace industry by providing a sales and use tax exemption and a franchise tax credit for certain research and development (R&D) activities. The legislation defines qualified research and sets limitations on who can claim these benefits, specifically targeting entities engaged in operations within designated defense base development authorities. The goal is to encourage investment in innovative activities that can stimulate growth and job creation in Texas's aerospace sector.

Sentiment

The sentiment around HB 2943 appears to be generally positive among supporters, particularly within the aerospace sector and economic development circles. Proponents argue that it represents a vital step towards fostering innovation and competitiveness in a rapidly evolving global market. However, concerns have been raised over potential abuse of the exemptions and credits, particularly regarding the requirements for qualification and whether the benefits would outweigh the costs to the state.

Contention

Notable points of contention include the potential for inequities in how different entities within the aerospace industry might benefit from the proposed tax incentives. Critics argue that the bill could favor larger corporations with more resources for compliance and reporting while leaving smaller entities at a disadvantage. Additionally, the effectiveness of the bill in actually stimulating the intended economic growth remains a topic of debate, as does the overall impact on the state’s revenue from taxes.