LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION

March 2, 2015

TO:	Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	SB134 by Schwertner (Relating to the total revenue exemption for the franchise tax.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for SB134, As Introduced: an impact of $0 through the biennium ending August 31, 2017. 

Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($877,532,000) for the 2016-17 biennium.  Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2016	$0
2017	$0
2018	$0
2019	$0
2020	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable Revenue (Loss) from Property Tax Relief Fund 304
2016	($434,841,000)
2017	($442,691,000)
2018	($440,953,000)
2019	($449,161,000)
2020	($455,487,000)

Fiscal Analysis

The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, by increasing the amount of total revenue below which a taxable entity would owe no tax.  The current level is $1 million; the bill would raise the amount to $5 million.
 
The bill would take effect on January 1, 2016 and apply to franchise tax reports due on or after that date.

Methodology

The estimated fiscal impact of the bill is based on franchise tax liability of taxable entities with total revenue between $1 million and $5 million.    

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

UP, KK, SD