Texas House Bill HB2428

Texas 2025 - 89th Regular

• Filed: 2/5/25

Caption

Relating to certain reimbursements and discounts allowed for the collection and payment of sales and use taxes.

Impact

The changes proposed in HB2428 could have significant implications for state revenue and taxpayer behavior. By providing a structured approach to tax deductions for collection costs, the bill aims to incentivize accurate tax reporting and timely payments by reducing the financial burden on taxpayers. This may enhance compliance rates and encourage appropriate revenue flow into state coffers. Furthermore, the allocation of contributions derived from these deductions to grants for educational purposes could foster positive community benefits, as local governments may receive additional funding for projects under the Education Code.

Summary

House Bill 2428 addresses reimbursements and discounts for the collection and payment of sales and use taxes. The proposed legislation amends existing sections of the Texas Tax Code to specify the rates at which taxpayers may deduct amounts for tax collection expenses. Specifically, it highlights a reimbursement structure where taxpayerscan deduct one-half of one percent of the taxes due, excluding those imposed on credit card sales. Additionally, for taxes related to credit card sales, taxpayers may withhold 2.5 percent, capped at $10 million per calendar quarter. The bill stipulates provisions for the prepayment of taxes, allowing taxpayers to claim further deductions based on a reasonable estimate of their tax liability, although the amendments also place restrictions on these deductions relative to credit card related taxes.

Contention

While the bill presents advantages in tax administration, it may elicit contention regarding the overall fiscal impact on state resources and the potential for misuse of deductions. Critics may argue that the cap on credit card tax reimbursements could be insufficient for larger businesses, thus impeding fair competition among smaller enterprises. Furthermore, the limitations placed on prepayment deductions may raise concerns about taxpayer equity, as those unable to accurately estimate their tax liabilities could be disadvantaged. Stakeholders from various sectors might voice their opinions on balancing taxpayer relief with the necessity to maintain a stable tax system.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 151. Limited Sales, Excise, And Use Tax
  • Section: 423
  • Section: 424