Texas House Bill HJR48

Texas 2017 - 85th 1st C.S.

Caption

Proposing a constitutional amendment authorizing the legislature to exempt from ad valorem taxation income-producing tangible personal property owned by certain small businesses.

Impact

The proposed amendment has the potential to significantly alter Texas tax law by providing a specific exemption that could lead to a decrease in overall tax revenues from property taxes, especially in regions with a high concentration of small businesses. By relieving these businesses from ad valorem taxes on tangible personal property, the amendment could encourage job creation and economic development, enabling small businesses to invest more in their operations and workforce. However, it also raises questions regarding the sustainability of local government funding, as property taxes are a critical source of revenue for municipalities.

Summary

HJR48 is a joint resolution that proposes a constitutional amendment to exempt income-producing tangible personal property owned by certain small businesses from ad valorem taxation. This amendment offers the legislature the power to define what constitutes a 'small business' and to implement laws accordingly. The key objective is to provide relief to small businesses by reducing their tax burden on property that is vital for generating income. This initiative seeks to promote growth and sustainability among small enterprises in Texas, which are often considered the backbone of the state's economy.

Contention

Debate surrounding HJR48 may center on the implications of granting tax exemptions to small businesses while balancing the need for sufficient funding for public services. Proponents argue that the financial relief provided by the exemption could lead to a healthier economy, which in turn benefits the larger community through job creation and economic activity. Conversely, opponents may express concerns about the precedent set by preferential tax treatment and its potential effect on equity among businesses of varying sizes. Additionally, there may be apprehensions regarding the lack of specificity in the definition of 'small business' and the criteria that will be applied to determine eligibility for the tax exemption.