Margin tax bills scheduled for hearing

On Wednesday, April 15, 2009, the House Ways and Means committee will hear many of the margin tax bills filed this session. The committee will likely leave all the bills pending, but having the hearing is the first step in the bill clearing the committee. Chairman Oliveira (D-Brownsville) has stated that bills that cost the state revenue would have a hard time being brought up for a vote in his committee.

Here are some of the bills and topics on Wednesday’s agenda.

  • HBs 277, 720, 1220, 1667, 2845 and 4765 all raise the minimum taxable revenue from $300,000 to $1 million.

  • HB 2227 raises the minimum taxable revenue to $1.5 million and HB 2534 to $5 million.

  • HB 1825 not only raises the minimum taxable revenue to $1 million, but also allows graduated tax rates for the first $10 million of taxable margin.

  • HB 4766 raises the minimum taxable revenue to $750,000 and gives tax discount for revenues between $750,000 and $1 million.

  • HB 1758 exempts all franchise payments below $10,000.

  • HB 3835 eliminates the existing specific flow through exemptions in the law but leaves the general language allowing flow through exemptions.

  • HB 1036 repeals the margin tax and re-institutes the former franchise tax.

  • HB 2944 cuts the retail/wholesale tax rates in half.

  • HB 3927 determines when Internet hosting revenues are Texas revenues.

  • HB 4269 clarifies that passive income includes all capital gains from real estate, not just “net” gains.

Several bills exempt specific types of revenues from taxation as follows:

  • HB 1994 exempts the cost of administering vaccines.

  • HB 2391 exempts guaranteed payments to performing artists.

  • HB 3189 exempts landlords’ collections of property taxes, maintenance payments, etc. from tenants.

  • HB 3778 exempts delivery services

HB 3237 is an omnibus bill that gives taxpayers the option of using federal cost of goods sold, allows compensation deductions for distributions to Professional Corporations or Professional Associations as long as those entities are owned by natural persons, restricts partnership distributions included in compensation deductions to income distributions only (losses are excluded from the computation), allows compensation deductions for payments to independent contractors whose earnings are reported on Federal Form 1099, repeals the Finnigan reporting requirements and reduces the maximum total revenue that can be taxed from 70% to 45%.

HB 4003 is another omnibus bill that establishes graduated tax rates of the top bracket rate of .5%, raises the minimum taxable revenue to $1 million, raises the minimum franchise tax due before payment is required from $1,000 to $5,000, excuses an entity form paying any franchise tax for any year when its federal taxable income is zero or less, eliminates the detailed cost of goods sold sections of the law and requires COGS to be determined by line item reference to the federal return, allows compensation deductions for payments to independent contractors whose earnings are reported on Federal Form 1099, changes the apportionment formula from Joyce to Finnigan and repeals the section requiring Finnegan info only reporting.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s