Texas House Bill HB83

Texas 2015 - 84th Regular

• Filed: 11/10/14

Caption

Relating to the computation of cost of goods sold for purposes of the franchise tax by taxable entities primarily engaged in the business of harvesting trees for wood.

Impact

If enacted, HB83 would amend Section 171.1012 of the Texas Tax Code, providing specific guidelines on what constitutes direct costs. These include expenses related to moving harvesting equipment, severing timber, transporting timber, and maintaining necessary equipment. By enabling timber businesses to deduct these costs, the bill could enhance the financial viability of companies operating in this sector, potentially leading to growth and increased competitiveness within the industry.

Summary

House Bill 83 (HB83) focuses on the computation of cost of goods sold for taxable entities primarily engaged in the business of harvesting trees for wood. The bill aims to allow these entities to subtract direct costs associated with timber acquisition or production from their gross revenues when calculating franchise tax. This adjustment is significant as it recognizes and addresses the unique costs that timber businesses incur, which can vary significantly from typical manufacturing or retail operations.

Contention

The implications of HB83 may generate discussions among lawmakers concerning the fairness of tax advantages provided to specific industries. Supporters argue that the bill is necessary to acknowledge the distinct challenges faced by the timber industry, promoting its growth and sustainability. However, there may be concerns about whether such tax deductions create an uneven playing field compared to other sectors that do not have similar provisions.