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A BILL TO BE ENTITLED
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AN ACT
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relating to the franchise tax and alternative revenue sources and |
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spending priorities for this state; repealing the franchise tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. This Act may be cited as the Revenue Reform Act |
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of 2019. |
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SECTION 2. (a) The comptroller of public accounts shall |
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conduct a comprehensive study that: |
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(1) analyzes and compares: |
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(A) the feasibility of implementing alternative |
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methods to the franchise tax imposed under Chapter 171, Tax Code, by |
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which revenue may be generated to address the needs of this state; |
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and |
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(B) the effectiveness of each of those methods in |
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generating sufficient revenue to address those needs; and |
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(2) prioritizes the revenue needs of this state and |
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identifies potential reductions in expenditures by this state. |
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(b) The comptroller of public accounts shall consider the |
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funding priorities and requirements established by the Texas |
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Constitution in prioritizing the revenue needs of this state as |
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required by Subsection (a)(2) of this section. |
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(c) The study conducted under Subsection (a) of this section |
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must include an analysis and comparison of the following |
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revenue-generating methods: |
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(1) imposing a transaction tax in this state; |
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(2) imposing a value-added tax in this state; |
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(3) eliminating exemptions from the sales and use tax |
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imposed under Chapter 151, Tax Code; |
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(4) increasing the rate of the sales and use tax |
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imposed under Chapter 151, Tax Code; |
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(5) imposing the sales and use tax under Chapter 151, |
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Tax Code, according to rate brackets, the applications of which |
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vary according to the sales price of a taxable item; |
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(6) imposing a business sales tax in this state in |
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addition to the sales and use tax imposed under Chapter 151, Tax |
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Code; |
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(7) any other method the comptroller of public |
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accounts considers potentially effective in addressing the revenue |
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needs of this state; and |
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(8) imposing a business franchise tax in this state on |
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the basis of net profit. |
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(d) Not later than November 1, 2022, the comptroller of |
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public accounts shall submit a report to the legislature regarding |
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the results of the study conducted under this section. The report |
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must: |
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(1) identify one or more revenue-generating methods |
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the comptroller determines would be most effective in meeting the |
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revenue needs of this state; |
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(2) include a description of any legislation necessary |
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to implement the methods identified under Subdivision (1) of this |
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subsection; and |
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(3) propose specific reductions in expenditures by |
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this state and any legislation necessary to implement those |
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reductions. |
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SECTION 3. Effective January 1, 2026, Chapter 171, Tax |
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Code, is repealed. |
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SECTION 4. The change in law made by Section 3 of this Act |
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does not affect tax liability accruing before the effective date of |
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that section. That liability continues in effect as if this Act had |
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not been enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 5. Except as otherwise provided by this Act, this |
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Act takes effect September 1, 2019. |