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.