HBA-ATS H.B. 1050 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1050
By: Sadler
Ways & Means
3/2/1999
Introduced



BACKGROUND AND PURPOSE 

The Tax Code imposes a franchise tax on each corporation and limited
liability company doing business in Texas.  If the amount of the tax is
less than $100, these business entities are not required to pay the tax.
By redirecting the tax costs (the actual tax and the costs incurred in
filing the return) into other business expenses, small businesses with thin
profit margins may become more profitable and thereby stimulate the state's
overall economy.  H.B. 1050 exempts from the franchise tax each corporation
and limited liability company doing business in Texas whose total gross
receipts are $100,000 or less. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter B, Chapter 171, Tax Code, by adding Section
171.054, to provide that a corporation is exempted from the franchise tax
if the total gross receipts from the corporation's entire business are
$100,000 or less. 

SECTION 2.  Effective date: January 1, 2000.
                       Makes application of this Act prospective.

SECTION 3.  Emergency clause.