Texas 2017 - 85th Regular

Texas House Bill HB102

Filed

11/14/16

Out of House Committee

Voted on by House

Out of Senate Committee

Voted on by Senate

Governor Action

Bill Becomes Law

Caption

Relating to exemptions from ad valorem taxes, the sales and use tax, and the franchise tax for certain businesses during an initial period of operation in this state.

Impact

The enactment of HB 102 is expected to significantly impact Texas's tax structure as it relates to new businesses. By providing tax relief during the initial years of operation, the bill aims to reduce the financial burden on startups, enabling them to invest more into their growth and operations. This could lead to enhanced job creation and economic stimulation in regions that may otherwise struggle to attract new enterprises. Local governments will have the authority to adopt these exemptions, which creates variability in application depending on governance at the local level.

Summary

House Bill 102, also known as the Texas Open for Business Act, introduces tax exemptions for certain new businesses during their initial operational period in Texas. The bill specifically targets businesses located in counties with populations of 250,000 or less and aims to exempt these entities from ad valorem taxes, sales and use taxes, and franchise taxes for up to a decade. The initiative is designed to encourage economic development and attraction of new businesses to underserved areas of Texas.

Contention

However, the bill has garnered some contention, particularly regarding the implications for the state's tax base and long-term fiscal health. Opponents argue that while tax incentives may temporarily assist new businesses, they may lead to reduced revenue for public services if these exemptions are widely adopted and not closely monitored. Concerns have also been raised about the potential for misuse, where businesses that do not create sustainable employment or meet the criteria for being classified as a 'new business' could exploit these tax benefits. As such, adherence to regulatory frameworks for these exemptions will be crucial.

Companion Bills

TX HJR18

Enabling for Proposing a constitutional amendment authorizing the governing bodies of certain political subdivisions to exempt from ad valorem taxation the real and tangible personal property of businesses during an initial period of operation in this state.

Previously Filed As

TX SB5

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.

TX HB2987

Relating to the exemption of tangible personal property from ad valorem taxation; making conforming changes.

TX SB1789

Relating to the exemption of tangible personal property from ad valorem taxation; making conforming changes.

TX SB871

Relating to the exemption of inventory from ad valorem taxation.

TX HB4851

Relating to an exemption from ad valorem taxation of the real and personal property owned and exclusively used by a labor organization for the organization's operations.

TX HB4890

Relating to installment payments of ad valorem taxes.

TX HB3621

Relating to a local option exemption from ad valorem taxation by a county or municipality of all or part of the appraised value of real property used to operate a child-care facility.

TX SB1145

Relating to a local option exemption from ad valorem taxation by a county or municipality of all or part of the appraised value of real property used to operate a child-care facility.

TX SB1

Relating to providing property tax relief through the public school finance system, exemptions, and limitations on taxes and providing franchise tax relief.

TX SB1956

Relating to an exemption from ad valorem taxation of the residence homestead of a Congressional Medal of Honor recipient or the surviving spouse of a Congressional Medal of Honor recipient.

Similar Bills

TX HB79

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.

TX HB590

Relating to the creation of research technology corporations for the development and commercialization of technologies owned by institutions of higher education or by certain medical centers with members that are institutions of higher education; providing for tax exemptions; providing a penalty.