HB 500, Reps. Hilderbran, et al.

HB 509, Reps. Murphy, et al. &
HB 607, Reps. Scott Turner, et al.

Tax Cut in 2014-15

$396.8 million

$3.75 billion

Total Tax Cut in 2016-17

$401.9 million

$7.40 billion

2018 Yearly Tax Cut

$197.8 million

$4.74 billion

Tax Cut Method

Reworks the current business franchise tax by changing definitions of taxable margin for items such as barium sulfate, wood, waterways, agricultural aircraft, and landmen services.

Reduction of the percentage taxed on margin with full elimination of the business franchise tax on Jan. 1, 2017

Status

To be debated on House Floor May 7, 2013

Committee substitute passed House Ways & Means on May 4, 2013

HB 500 Significant Pre-Filed Author Amendments due to be considered
May 7, 2013

·   Allows Form 1099 business expense deductions off of taxable margin for all Texas businesses, expanding franchise tax reform to all Texas businesses. Reduces the tax burden by $290.1 million in 2014-15 biennium and similar amount thereafter. (831419)

·   Institutes a progressive franchise tax by taxing 40% of taxable revenue on revenue of less than $5 million; 50% on revenue from $5 to $10 million; 60% on revenue from $10 to $15 million and 70% on amount greater than $15 million. Reduces the tax burden by $290.4 million in 2014-15 biennium and similar amount thereafter. (831421)

·   Perfecting amendments, including a provision that would exempt franchise taxes for 3 years for firms that relocate the main offices to Texas; also provides tax planning assurance for the $1 million taxable margin exemption, gradually increasing the size of the companies that can deduct the first $1 million from $5 in 2014, to $10 million in 2016, to $15 million in 2018 and $20 million in 2020. Reduces the tax burden by $649.7 million in 2014-15 biennium and growing to 865.9 million in the 2016-17 budget period. (831423)

·   Raises the taxable margin exemption for all businesses from the temporary level of $1 million in revenue today to $5 million in 2016 (a tax cut of approximately $413 million per year), $10 million in 2018 (a tax cut of approximately $602 million per year), $15 million in 2020 (a tax cut of approximately $655 million per year), $20 million in 2022 (a tax cut of approximately $710 million per year). (831424)

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