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 to
General Revenue Related Funds
2024$0
2025$0
2026$0
2027$0
2028$0

All Funds, Five-Year Impact:

Fiscal Year Probable Revenue Gain/(Loss) from
Property Tax Relief Fund
304
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:
LBB Staff:
JMc, SD, BRI