Relating to exemptions from the sales and use tax and the franchise tax for certain businesses during an initial period of operation in the state.
Impact
If enacted, HB79 would amend the Texas Tax Code to allow new businesses that meet specified criteria to benefit from tax exemptions for an initial period of operation. By exempting sales and franchise taxes for new businesses that fulfill criteria such as being primarily engaged in manufacturing or qualified research, the legislation aims to foster growth in strategic sectors. This could lead to increased job creation and bolster the economy in areas of the state that historically struggle to attract new businesses due to competitive tax burdens.
Summary
House Bill 79, known as the Texas Open for Business Act, introduces significant tax exemptions aimed at encouraging new business establishment within the state. The bill proposes exemptions from both sales and franchise taxes for certain businesses during their initial operational phase. Specifically, it seeks to incentivize businesses that create new, permanent, full-time jobs within Texas, adding provisions that define what qualifies a business as 'new' based on its operational history and location. The intention behind the bill is to stimulate economic growth, particularly in counties with smaller populations, by reducing the financial burdens often associated with startup operations.
Contention
While proponents of HB79 argue that the bill will create a more favorable environment for new businesses, opponents may raise concerns about the potential loss of tax revenue for the state, which could impact public services. Critics may argue that the bill disproportionately favors larger businesses and could lead to inequities within the small business community. Additionally, the criteria for qualifying as a 'new business' might create barriers for businesses that do not fit neatly into the established definitions, potentially leaving some small entrepreneurs without access to these benefits.
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the production of income and a franchise tax credit for the payment of certain related ad valorem taxes.
Relating to the elimination of certain property taxes for school district maintenance and operations and the provision of public education funding by increasing the rates of certain state taxes.
Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.
Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.
Relating to the transfer of the regulation of property tax professionals from the Texas Department of Licensing and Regulation to the comptroller of public accounts; providing civil and administrative penalties.
Relating to the abolishment of the Texas Council on Purchasing from People with Disabilities and the transfer of its functions to the Texas Workforce Commission.
Relating to the abolishment of the Texas Council on Purchasing from People with Disabilities and the transfer of its functions to the comptroller of public accounts.
Relating to a Pan American Games trust fund, an Olympic Games trust fund, a Major Events trust fund, a Motor Sports Racing trust fund, and an Events trust fund for sporting and non-sporting events, and to the abolishment of the special event trust fund.