BILL ANALYSIS

C.S.H.B. 1579

By: Button

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Accepting credit and debit cards as a means of payment is a necessity for the majority of businesses in Texas. When a credit card is used for payment at a business, the credit card company charges that business for processing the transaction. According to interested parties, Texas is one of the few states that prohibit merchants from surcharging customers to defray costs associated with accepting credit and debit cards, despite credit card fees posing a major expense to Texas businesses. C.S.H.B. 1579 seeks to lessen this burden by permitting a portion of the costs associated with accepting credit or debit cards as a means of payment to be included in the cost of goods sold when determining a business's franchise tax liability.

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

C.S.H.B. 1579 amends the Tax Code to include 20 percent of the costs attributable to accepting credit cards and debit cards as a means of payment in the cost of goods sold for purposes of determining taxable margin under the franchise tax. 

EFFECTIVE DATE

January 1, 2014.

COMPARISON OF ORIGINAL AND SUBSTITUTE

While C.S.H.B. 1579 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.

INTRODUCED	HOUSE COMMITTEE SUBSTITUTE
SECTION 1. Section 171.1012, Tax Code, is amended by adding Subsection (p) to read as follows: (p) Notwithstanding Subsection (e)(2) or any other provision of this section, the cost of goods sold includes the costs attributable to the acceptance of credit cards and debit cards as a means of payment.	SECTION 1. Section 171.1012, Tax Code, is amended by adding Subsection (p) to read as follows: (p) Notwithstanding Subsection (e)(2) or any other provision of this section, the cost of goods sold includes 20 percent of the costs attributable to the acceptance of credit cards and debit cards as a means of payment.
SECTION 2. This Act applies only to a report originally due on or after the effective date of this Act.	SECTION 2. Same as introduced version.
SECTION 3. This Act takes effect January 1, 2014.	SECTION 3. Same as introduced version.