Vote Smart's Synopsis:

Vote to pass a bill that establishes standards and procedures for adjusting, controlling, and reporting franchise tax rates and other revenue-related funds.

Highlights:

• Requires the comptroller of public accounts to determine the ending balance of general revenue-related funds from the preceding state fiscal biennium and take the following actions no later than December 15 of each odd-numbered year (Secs. 1 & 2):

• Determine and adopt the adjusted franchise tax rates; and

• Publish a notice about the determined rates in the Texas Register.

• Requires that, in determining the adjusted tax rates, the amount should proportionally reflect the reductions of franchise tax rates that are effective when the determination is made (Sec. 2).

• Specifies that the adjusted tax rates should be determined and provided in a report every even-numbered year (Sec. 2).

• Specifies that beginning on September 1, 2017, franchise tax rates expire on December 31 of a given year if in that state fiscal year the adjusted franchise tax rate is less than 15% of the franchise tax rate (Sec. 5).

• Requires a standard computation formula to be applied in order to calculate the taxable margin for franchise tax (Sec. 2).

• Specifies that with regard to the expiration date of the tax, this bill does not affect the status of a taxable entity that has had certain sanctions imposed or suits filed against it (Sec. 5).

• Authorizes the comptroller, secretary of state, or attorney general to take action against a taxable entity that is in violation of this bill (Sec. 5).

• Authorizes a taxable entity to contest a forfeiture, revocation, lawsuit, or appointment of a Receiver (Sec. 5).

• Specifies that this bill applies only to a franchise tax report created on or after January 1, 2020 (Sec. 6).

• Specifies that the effective date of most provisions in this bill is September 1, 2019 (Sec. 7).

Full Bill Text