House approves margin tax cut for small business

The House unanimously passed HB 4765 by Rep. Rene Oliveira (D-Brownsville). The bill raises the total revenue exemption from $300,000 to $1 million for two years, reverting to $300,000 if no action is taken during the 2011 legislative session. A number of legislators had filed similar bills but Oliveira, Chairman of the Ways and Means committee, filed HB 4765 to include the two year limitation. All the other bills would have made the change permanent.

Oliveira’s bill will remove thousands of businesses from the franchise tax rolls. Floor debate indicated that there will be fewer franchise tax-paying entities now than were paying the loophole-riddled prior franchise tax.

Rep. Jim Keffer (R-Eastland), Ways and Means chair during last session, offered an amendment to raise the revenue exemption from $300,000 to $600,000 and reduce the tax on taxpayers eligible for the E-Z computation (entities with $10 million or less in revenue).Keffer pointed out that this would actually help more taxpayers while not giving so many a complete pass on paying the tax. The amendment was withdrawn due to procedural issues.

Read the Austin American-Statesman coverage here.

Comments

[Robbie Paul]

It would be nice to know which years the two years apply to!

[Linda Messing, TSCPA]

2010 and 2011.

[Robbie Paul]

Thanks!