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:
HB2944 by Harper-Brown (Relating to the franchise tax rates.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB2944, As Introduced: a negative impact of ($1,056,267,000) through the biennium ending August 31, 2011.

The bill will also have a direct impact of a revenue loss to the Property Tax Relief Fund of $3,615,872,000 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 ($518,807,000)
2011 ($537,460,000)
2012 ($601,001,000)
2013 ($630,411,000)
2014 ($641,033,000)




Fiscal Year Probable Revenue Gain/(Loss) from
General Revenue Fund
1 		Probable Revenue Gain/(Loss) from
Property Tax Relief Fund
304
2010 ($518,807,000) ($1,788,414,000)
2011 ($537,460,000) ($1,827,458,000)
2012 ($601,001,000) ($1,846,713,000)
2013 ($630,411,000) ($1,915,238,000)
2014 ($641,033,000) ($2,006,468,000)

Fiscal Analysis

The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, by changing the tax rates applicable to taxable entities' taxable margin. The rate for taxable entities primarily engaged in retail or wholesale trade would be reduced to 0.25 percent from 0.5 percent. The tax rate for other taxable entities would be reduced to 0.5 percent from 1 percent.

The bill would take effect January 1, 2010.


Methodology

The estimated fiscal impact of the bill was based on data reported on the 2008 franchise tax reports.

Local Government Impact

No fiscal implication to units of local government is anticipated.


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