FISCAL NOTE, 88TH LEGISLATURE 2nd CALLED SESSION 2023
July 11, 2023
TO:
Honorable Joan Huffman, Chair, Senate Committee on Finance
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB3 by Bettencourt (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 SB3, 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.