LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
 
April 15, 2009

TO:
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
 
FROM:
John S. O'Brien, Director, Legislative Budget Board
 
IN RE:
HB1220 by Hunter (Relating to the total revenue exemption for the franchise tax.), As Introduced



The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of $172,123,000 for the 2010-11 biennium. Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2010 $0
2011 $0
2012 $0
2013 $0
2014 $0




Fiscal Year Probable Savings/(Cost) from
Property Tax Relief Fund
304
2010 ($85,000,000)
2011 ($87,123,000)
2012 ($90,174,000)
2013 ($93,781,000)
2014 ($97,532,000)

Fiscal Analysis

The bill would amend Chapter 171of the Tax Code, relating to the franchise tax. The bill would change the total revenue exemption amount for the tax from $300,000 or less to $1,000,000 or less.

The bill would repeal Sections 171.0021 and 171.1016(d) of the Tax Code. Those sections deal with discounts from tax owed available to taxable entities with total revenue of $900,000 or less. The change in the exemption amount proposed in the bill would render these sections without impact on the calculation of franchise tax liability.

The bill would take effect January 1, 2010, and would apply to a report originally due on or after that date.


Methodology

The estimated fiscal impact of the bill is based on data reported on the 2008 franchise tax reports from taxable entities with total revenue of $1,000,000 or less.

Technology

There would be no significant technology impact to the Comptroller's Office.

Local Government Impact

No fiscal implication to units of local government is anticipated.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
JOB, MN, SM