| TO: | Honorable Steve Ogden, Chair, Senate Committee on Finance |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB4265 by Howard, Charlie (Relating to the definition of controlling interest for purposes of the franchise tax.), Committee Report 2nd House, Substituted |
The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax.
The bill would amend the definition of "controlling interest" for certain types of entities. Under current law, there is a single definition for controlling interest applicable to a partnership, an association, or any other entity other than a limited liability company. This bill would add separate definitions of controlling interest for an association, a trust, and for any other entity.
The bill would take effect on January 1, 2010, and apply to a report due on or after that date.
The expanded definitions of "controlling interest" continue to require that more than 50 percent be owned directly or indirectly for each type of entity. The bill clarifies the type of interest that must be owned for the various entity types. The bill would have no fiscal impact.
| Source Agencies: | 304 Comptroller of Public Accounts
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| LBB Staff: | JOB, MN, SD, SM
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