Texas House Bill HB983

Texas 2019 - 86th Regular

Caption

Relating to a franchise tax credit for enterprise projects for certain capital investments.

Impact

The implications of HB 983 include an adjustment to the existing franchise tax structure, where eligible businesses could see reduced tax liabilities based on their capital investments. This may attract more businesses to invest in Texas, thereby increasing economic activity, employment opportunities, and potentially resulting in higher tax revenues over time. It aims at supporting sectors crucial to the state's growth and providing a competitive edge in attracting new businesses to undertake substantial investments within the state.

Summary

House Bill 983 introduces a franchise tax credit intended to incentivize capital investments in designated enterprise projects within Texas. Specifically, the bill establishes criteria for what constitutes an 'enterprise project' and outlines the eligibility for these entities to receive a tax credit against their franchise tax. The credit is set at 7.5% of qualified capital investments made by the enterprise projects and applies to tangible personal property placed in service after January 1, 2015. This bill seeks to bolster economic development through enhanced support for enterprises that contribute significantly to the state's economy.

Contention

Notably, there may be points of contention regarding the allocation of state resources for these tax credits. Critics may argue that such measures could disproportionately favor larger enterprises over smaller businesses and startups that may need support as well. Furthermore, concerns regarding the long-term fiscal impacts on the state's budget could be raised, primarily if the projected economic growth does not materialize as intended. The necessity of rigorous oversight and accountability measures to ensure that the benefits of this legislation translate to tangible economic improvements could also be emphasized.