Texas House Bill HB2864

Texas 2019 - 86th Regular

Caption

Relating to the E-Z computation of the franchise tax.

Impact

The legislative intent behind HB 2864 is to provide a more accessible framework for small businesses when it comes to fulfilling their tax obligations. By raising the revenue threshold from the previous $20 million to $25 million, the bill facilitates a greater number of businesses to qualify for the E-Z computation method. This change could lead to a reduced tax liability for a significant portion of Texas businesses, which may, in turn, promote economic growth and financial stability among smaller enterprises.

Summary

House Bill 2864 aims to modify the method of computing the franchise tax in Texas by adjusting the revenue threshold for taxable entities. Specifically, the bill allows entities with total revenue from their entire business not exceeding $25 million to utilize the E-Z computation method for tax calculations. This approach aims to simplify the tax process for smaller businesses, potentially easing their tax burden and administrative requirements associated with tax filings.

Contention

Though the bill has potential benefits for small businesses, discussions surrounding HB 2864 may also reflect concerns regarding the impact on state revenue. Critics might argue that expanding the E-Z computation eligibility could diminish the tax revenue collected from larger taxable entities, ultimately affecting state funding for public services. Moreover, there could be apprehensions from larger businesses that this bill creates an uneven playing field within the tax system, favoring smaller entities at the expense of broader tax equality.