Relating to a sales and use tax exemption and a franchise tax credit related to certain research and development activities.
Impact
By exempting tangible personal property and qualified services from sales and use taxes, SB859 is designed to lower the financial burden on companies engaged in qualified research activities. Furthermore, the introduction of a franchise tax credit based on qualified research expenses encourages companies to increase their investment in research within Texas. This is expected to enhance the state's competitive edge in the high-tech industry and might lead to strategic partnerships between private entities and educational institutions, fostering a more robust innovation ecosystem.
Summary
SB859 aims to provide both a sales and use tax exemption and a franchise tax credit specifically targeted toward certain research and development activities conducted within the state of Texas. The legislative findings suggest that while Texas accounts for a significant portion of the national economic activity, its investment in research and development is comparatively low. The bill seeks to encourage private-sector investment in research to foster innovation, create high-paying jobs, and promote economic growth within the state.
Sentiment
General sentiment around SB859 is positive among business communities and economic development advocates. Supporters of the bill argue it is a critical step toward addressing the disparity in research investments and enhancing Texas's position as a leader in technology and innovation. However, there are concerns about the effectiveness of tax credits in driving significant increases in research activity and fears over the potential implications for tax revenues. Critics may question whether the resources allocated for these tax exemptions and credits could be better used elsewhere.
Contention
Notable points of contention include discussions regarding the potential long-term fiscal impacts of the tax credit on the state's budget and whether the criteria for 'qualified research' are sufficiently inclusive to truly benefit small and mid-sized companies. Lawmakers debate the balance between incentivizing large companies, which may already have the resources for research, versus supporting smaller entities that may struggle to compete for these benefits. Stakeholders worry about unintended consequences that might arise from increased state intervention in the tax code for research funding.
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.
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.
Relating to measures to enhance and maintain the quality of state universities, including funding and incentives to support emerging public research universities, to the abolition of the higher education fund, to the institutional groupings under the Texas Higher Education Coordinating Board's accountability system, to the independent status of Lamar Institute of Technology, to research conducted by public universities and other state entities, and to the authorization of revenue bonds for certain institutions of higher education.
Relating to university funding, including university funding for excellence, the national research university fund, the abolition of the higher education fund, and the institutional groupings established by the Texas Higher Education Coordinating Board.
Relating to the national research university fund and the allocation of amounts appropriated from the fund, the abolition of the higher education fund, and the institutional groupings established by the Texas Higher Education Coordinating Board.
Relating to the administration and investment of, and distribution and use of money from, certain constitutional and statutory funds to support general academic teaching institutions in achieving national prominence as major research universities and driving the state economy; redesignating the national research university fund as the Texas University Fund.