LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 10, 2015 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB32 by Bonnen, Dennis (Relating to decreasing the rates of the franchise tax.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB32, As Introduced: an impact of $0 through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($445,963,000) for the 2016-17 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 10, 2015
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB32 by Bonnen, Dennis (Relating to decreasing the rates of the franchise tax.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB32 by Bonnen, Dennis (Relating to decreasing the rates of the franchise tax.), As Introduced
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB32 by Bonnen, Dennis (Relating to decreasing the rates of the franchise tax.), As Introduced
HB32 by Bonnen, Dennis (Relating to decreasing the rates of the franchise tax.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB32, As Introduced: an impact of $0 through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($445,963,000) for the 2016-17 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Estimated Two-year Net Impact to General Revenue Related Funds for HB32, As Introduced: an impact of $0 through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($445,963,000) for the 2016-17 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 $0 2017 $0 2018 $0 2019 $0 2020 $0
2016 $0
2017 $0
2018 $0
2019 $0
2020 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2016 ($220,997,000) 2017 ($224,966,000) 2018 ($224,083,000) 2019 ($228,254,000) 2020 ($231,469,000)
Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2016 ($220,997,000) 2017 ($224,966,000) 2018 ($224,083,000) 2019 ($228,254,000) 2020 ($231,469,000)
2016 ($220,997,000)
2017 ($224,966,000)
2018 ($224,083,000)
2019 ($228,254,000)
2020 ($231,469,000)
Fiscal Analysis
The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, to permanently change two tax rates applicable in determining franchise tax liability. The bill would set a tax rate of 0.95 percent for taxable entities not primarily engaged in retail or wholesale trade; the rate under current law is 1.0 percent. The bill would set a rate of 0.475 percent for taxable entities primarily engaged in retail or wholesale trade; the rate under current law is 0.5 percent. The bill would take effect on January 1, 2016, and apply to tax reports due on or after that date.
Methodology
The estimated fiscal impact is based on the Comptroller's franchise return databases and the 2016-2017 Biennial Revenue Estimate.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD
UP, KK, SD