SRC-JBJ C.S.S.B. 148 76(R)BILL ANALYSIS Senate Research CenterC.S.S.B. 148 76R6638 CBH-DBy: Fraser Finance 2/18/1999 Committee Report (Substituted) DIGEST Currently, the Tax Code exempts a Texas business from paying the franchise tax if the business owes less than $100 in tax. The exemption benefits a small business, which operates on small profit margins, by allowing the business to redirect the tax costs, the actual tax, and the incurred cost in filing the report, into business expansion and additional employment, in turn stimulating the Texas economy. S.B. 148 would broaden the threshold for an exemption to the franchise tax. PURPOSE As proposed, S.B. 148 introduces a new threshold for an exemption to the franchise tax based on $100,000 or less in gross receipts. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 171.002(d), Tax Code, to exempt a corporation from the levied tax if the amount is less than $100, or the amount of the corporation's gross receipts from its entire business under Sections 171.105 and 171.1051, including the amount excepted under 171.1051(a), is less than $100,000. Makes conforming changes. SECTION 2. Amends Section 171.204, Tax Code, to prohibit the comptroller from requiring an officer of a corporation owing no tax because of the application of Section 171.002(d)(2) to file an information report. Makes conforming changes. SECTION 3. Effective date: January 1, 2000. Makes application of this Act prospective. SECTION 4.Emergency clause. SUMMARY OF COMMITTEE CHANGES SECTION 1. Amends Section 171.002(d), Tax Code, to exempt a corporation from taxes if the amount of the corporation's gross receipts is less than $100,000, rather than $200,000.