BILL ANALYSIS

H.B. 4265

By: Howard, Charlie

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Different types of legal entities must pay franchise taxes. Section 171.0001(8)(B), Tax Code, defines controlling interests for partnerships, associations, trusts, and other entities in one paragraph.  This leads to confusing definitions because terminology is different for each of these different legal organizations. 

H.B. 4265 restructures the definition of controlling interest for purposes of the franchise tax. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 4265 amends the Tax Code to clarify the definition of "controlling interest" for a partnership, an association, a trust, a limited liability company, or for other legal entities for purposes of the franchise tax by defining the term separately for each entity.

EFFECTIVE DATE

January 1, 2010.