Relating to a franchise tax credit for research and development activities performed in conjunction with institutions of higher education; authorizing a tax credit.
Impact
The passage of HB 953 is expected to have significant implications for Texas state laws related to taxation and economic development. By allowing businesses to claim a tax credit for qualifying research expenses incurred through collaborations with higher education institutions, the bill seeks to foster a more favorable environment for research initiatives within the state. Moreover, it encourages companies to invest in innovative projects that could lead to advancements in various fields, offering a potential boost to state revenues in the long term through increased business activities and job creation.
Summary
House Bill 953 introduces a franchise tax credit directed at incentivizing research and development activities that are conducted in partnership with institutions of higher education. The bill aims to support both public and private colleges and universities by allowing taxable entities that engage in qualified research activities to receive a credit against their franchise tax, which serves as an incentive for businesses to collaborate with educational institutions. This initiative is positioned as a means to stimulate economic growth through innovation and development in Texas.
Contention
Despite the positive outlook for economic growth, there are concerns and discussions surrounding HB 953. Critics may argue about the sustainability of tax credits and whether this financial incentive could lead to reduced state tax revenues in the short term. Furthermore, there could be contention regarding the definition of 'qualified research' and the effectiveness of the program in truly encouraging meaningful collaborations between businesses and educational institutions. Overall, the bill has invoked a mixture of support and skepticism, calling into question its potential efficacy and impact on future state fiscal policies.
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the production of income and a franchise tax credit for the payment of certain related ad valorem taxes.