Texas House Bill HB1315

Texas 2015 - 84th Regular

Caption

Relating to temporary permissive alternate rates for the franchise tax.

Impact

If enacted, HB1315 would directly affect the taxation framework for businesses operating within Texas. The amendments are designed to alleviate some tax burden by allowing entities, particularly in retail and wholesale trade, to benefit from lower tax rates. This could encourage economic activity within these sectors, promoting growth and stability during the specified reporting periods.

Summary

House Bill 1315 proposes amendments to the Texas Tax Code, specifically introducing temporary permissive alternate rates for franchise tax applicable to taxable entities for the years 2016 and 2017. The bill allows certain taxable entities to opt for a reduced tax rate of 0.95% of taxable margin and for retail or wholesale businesses, a further reduced rate of 0.475%. These provisions aim to provide temporary relief to businesses during the reporting periods specified in the bill.

Contention

While the bill appears to offer immediate financial relief to various business sectors, there could be underlying contentions regarding how such temporary tax reductions may affect state revenue in the long term. Legislators could raise concerns about the sustainability of reducing tax rates and the potential impact on funding for public services that are reliant on franchise tax revenues. Stakeholders may also debate the broader implications of preferential tax treatments and whether they create an uneven playing field among different sectors.