TO: | Honorable Rene Oliveira, Chair, House Committee on Ways & Means |
FROM: | John S. O'Brien, Director, Legislative Budget Board |
IN RE: | HB3516 by Howard, Charlie (Relating to the rate and calculation of the franchise tax for certain oil and gas related entities.), As Introduced |
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 Revenue Gain/(Loss) from Property Tax Relief Fund 304 |
---|---|
2010 | ($60,914,000) |
2011 | ($62,437,000) |
2012 | ($64,623,000) |
2013 | ($67,208,000) |
2014 | ($69,897,000) |
The bill would amend Chapter 171 of the Tax Code (franchise tax) by adding provisions relating to the rate and calculation of the franchise tax for certain oil and gas related entities.
The bill would expand the type of entities primarily engaged in retail or wholesale trade to include entities primarily engaged in gathering, transporting, or processing certain products. The products would be those described in the Standard Industrial Classification Manual under industry groups 132 (natural gas liquids), 461 (pipelines, except natural gas), and 492 (gas production and distribution).
The bill would add a provision relating to cost of goods sold that would allow a taxable entity that owns or operates a pipeline to subtract as costs of goods sold certain items. These would include costs related to processing, altering, improving, gathering, transporting, or storing oil, gas, natural gas liquids, refined petroleum products, the constituents of oil or gas, oil or gas products, chemicals, or carbon dioxide.
The bill would take effect on January 1, 2010, and apply to a report due on or after that date.
Source Agencies: | 304 Comptroller of Public Accounts
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LBB Staff: | JOB, MN, SD, SM
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