Texas House Bill HB79

Texas 2015 - 84th Regular

• Filed: 11/10/14

Caption

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.