Texas Senate Bill SB134

Texas 2015 - 84th Regular

• Filed: 11/10/14

Caption

Relating to the total revenue exemption for the franchise tax.

Impact

The proposed changes to the franchise tax are expected to provide significant financial relief to small business owners across Texas. By raising the exemption level, many businesses that previously faced tax liabilities will no longer be subject to the franchise tax, thereby freeing up capital for investment, hiring, and expansion. The bill is part of a broader strategy by state lawmakers to promote economic development and support small businesses, which are critical to the state's economy.

Summary

SB134 is a legislative proposal that aims to amend the Texas Tax Code by increasing the total revenue exemption threshold for the franchise tax. Specifically, the bill proposes that a taxable entity will not be required to pay any tax if their total revenue is less than or equal to $5 million per year. This adjustment is designed to alleviate the tax burden on small businesses, allowing them to reinvest more resources into their operations and growth. The bill reflects an effort to enhance the economic environment for smaller entities in Texas.

Contention

While proponents of SB134 argue that the bill represents a positive step toward supporting small businesses, opponents may raise concerns about the potential impact on state revenue. Critics might argue that increasing the exemption could reduce funds available for public services and infrastructure, which are partially supported by franchise tax revenues. The discussion could also focus on the balance between incentivizing business growth and maintaining a stable revenue stream for the state.

Notable_points

The bill is part of ongoing conversations about taxation and economic policy in Texas, highlighting the state's commitment to fostering a business-friendly environment. Additionally, the effective date of the changes, projected to occur on January 1, 2016, indicates the urgency behind implementing tax reforms aimed at enhancing the economic landscape for small businesses.