Texas House Bill HB1962

Texas 2015 - 84th Regular

Caption

Relating to the franchise tax and alternative revenue sources and spending priorities for this state; repealing the franchise tax.

Impact

Should HB 1962 be enacted, it would significantly impact the state's tax structure by eliminating the franchise tax as of January 1, 2020. This change may shift the burden of taxation onto alternative forms of revenue, which could include transaction taxes or value-added taxes. The study required by the bill will provide a detailed assessment of various methods, potentially leading to legislative actions aimed at revising Texas's tax framework to ensure sufficient revenue generation.

Summary

House Bill 1962, titled the Revenue Reform Act of 2015, proposes the repeal of the franchise tax currently imposed under Chapter 171 of the Tax Code. The bill mandates a comprehensive study by the comptroller of public accounts to analyze alternative revenue-generating methods that could address the state's needs. The legislation aims to identify effective fiscal measures while prioritizing the state's revenue requirements in accordance with constitutional directives.

Contention

The bill has the potential to generate debate concerning the implications of shifting from a franchise tax to alternative taxation methods. Proponents of the repeal argue that the franchise tax is a burden on businesses and suggest that alternative revenue sources could stimulate growth and competitiveness. Conversely, opponents may express concerns regarding the adequacy and sustainability of alternative taxes, especially regarding their impact on lower-income residents and small businesses. The comprehensive study required by the bill is likely to be closely scrutinized for its findings and recommendations.