Texas House Bill HB2307

Texas 2015 - 84th Regular

Caption

Relating to the allocation of certain surplus state revenue for periodic reductions in the state sales tax rate.

Impact

If enacted, HB2307 could significantly impact state laws governing taxation and revenue allocation. By creating a dedicated fund for sales tax reductions, the bill would provide the Texas comptroller with a mechanism to lower the sales tax rate temporarily when state revenues permit. This change may enhance the predictability and frequency of tax rate decreases, potentially benefiting consumers and businesses during designated periods. The automatic nature of these reductions, contingent on sufficient funding, exemplifies a proactive approach to fiscal management in Texas.

Summary

House Bill 2307 aims to establish a Sales Tax Reduction Fund to facilitate periodic reductions in the state sales tax rate using certain surplus state revenue. The bill proposes an amendment to the Government Code by introducing Section 403.108, which details the mechanics of the fund's operation, including how money will be deposited and utilized. It sets forth guidelines for the comptroller to manage the fund, including transferring and depositing money to ensure a robust support system for tax reduction. Moreover, the bill provides explicit permission for using this fund only for sales tax reduction periods defined under the Texas Tax Code.

Contention

Despite the potential benefits, the bill may encounter contentious debates surrounding fiscal responsibility and the impact of reduced tax revenue on state services. Critics might express concerns about the implications of reduced sales tax income on funding for public services, particularly in education and infrastructure. Proponents, on the other hand, may argue that promoting consumer spending through lower sales taxes can stimulate the economy and benefit businesses in Texas. Additional concerns might involve the mechanisms for determining what constitutes 'surplus revenue' and the long-term effects of frequent tax rate changes.