LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 88TH LEGISLATURE 2nd CALLED SESSION 2023 July 11, 2023 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB3 by Geren (Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB3, As Introduced : an impact of $0 through the biennium ending August 31, 2025. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($600,000,000) for the 2024-25 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2024$02025$02026$02027$02028$0All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromProperty Tax Relief Fund3042024($300,000,000)2025($300,000,000)2026($300,000,000)2027($300,000,000)2028($300,000,000) Fiscal AnalysisThe bill would amend Chapter 171 of the Tax Code, relating to the franchise tax, by increasing the amount of total revenue below which a taxable entity would owe no tax. The current level is $1.0 million, and this bill would raise the amount to $2.47 million.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATURE 2nd CALLED SESSION 2023
July 11, 2023
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB3 by Geren (Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB3 by Geren (Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.), As Introduced
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB3 by Geren (Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.), As Introduced
HB3 by Geren (Relating to the amount of the total revenue exemption for the franchise tax and the exclusion of certain taxable entities from the requirement to file a franchise tax report.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3, As Introduced : an impact of $0 through the biennium ending August 31, 2025. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($600,000,000) for the 2024-25 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3, As Introduced : an impact of $0 through the biennium ending August 31, 2025. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($600,000,000) for the 2024-25 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($600,000,000) for the 2024-25 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
General Revenue-Related Funds, Five- Year Impact:
2024 $0
2025 $0
2026 $0
2027 $0
2028 $0
All Funds, Five-Year Impact:
2024 ($300,000,000)
2025 ($300,000,000)
2026 ($300,000,000)
2027 ($300,000,000)
2028 ($300,000,000)
Fiscal Analysis
The bill would amend Chapter 171 of the Tax Code, relating to the franchise tax, by increasing the amount of total revenue below which a taxable entity would owe no tax. The current level is $1.0 million, and this bill would raise the amount to $2.47 million.
Methodology
The provisions of the bill related to increasing the amount of total revenue below which a taxable entity would owe no franchise tax from $1.0 to $2.47 million would result in reduced revenue to the Property Tax Relief Fund.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td >
LBB Staff: b > td > JMc, SD, BRI
JMc, SD, BRI