Texas House Bill HB321

Texas 2015 - 84th Regular

• Filed: 11/17/14

Caption

Relating to the repeal of the franchise tax.

Impact

The impact of HB321 is significant as it seeks to alter the existing tax framework in Texas. By repealing the franchise tax, the bill would directly affect the financial obligations of many corporations operating within the state. The transitional tax provision ensures that businesses will have a final assessment based on previous tax frameworks, creating a buffer period for compliance. This change may lead to a reduction in overall tax revenue for the state, prompting discussions on how to make up for potential shortfalls in funding for public services and infrastructure.

Summary

House Bill 321, also known as the Business Tax Relief Act, proposes the repeal of the franchise tax in Texas. The bill aims to eliminate this tax burden on businesses, potentially fostering a more favorable environment for economic growth and attracting new companies to the state. Proponents argue that such a repeal could lead to increased investment and job creation, thereby benefiting the economy as a whole. The bill outlines specific measures for the repeal and includes provisions related to transitional regulations to ensure a smooth process for businesses currently subject to the franchise tax.

Contention

Notable points of contention surrounding HB321 include concerns about the potential loss of state revenue and the implications for public services that rely on tax revenue. Opponents of the bill may argue that the repeal could disproportionately affect funding for education, healthcare, and other essential programs. Additionally, there may be debates about the fairness of tax burdens on smaller businesses compared to larger entities, and whether repeal will genuinely lead to the anticipated economic benefits or simply shift the tax burden elsewhere.