Much of our focus these days seems to be on the goings-on in Washington. From the economy to health care reform, it seems that every day we are inundated with news of proposed legislation at the federal level.
And yet, closer to home, our own state Legislature recently passed legislation equally deserving of our attention. With the economy as the backdrop, tax relief and economic development took on added significance during the 81st Legislative Session.
Tax Relief
On the tax front, many small businesses in Texas will soon breathe a sigh of relief as a result of House Bill 4765 [Rep. Rene Oliveira (D-Brownsville/Sen. Dan Patrick (R-Houston)]. House Bill 4765 increases the exemption amount available to businesses subject to the Texas Franchise Tax, a privilege tax imposed on each taxable entity chartered, organized or doing business in Texas.
Under this new bill, the threshold at which businesses become subject to the Texas Franchise Tax has been raised from $300,000 to $1 million for the 2010 and 2011 tax years. Beginning in 2012, the amount decreases to $600,000.
What does this mean for small businesses in Texas? Fewer small businesses will pay a franchise tax. According to the Governor’s Office, the new higher gross revenue floor is expected to result in tax savings to an estimated 40,000 small businesses.
Spurring the Texas Economy
Some of the state’s key economic development tools saw an infusion of funds as a result of the 81st Legislative Session.
The Texas Enterprise Fund (TEF), which provides state leaders with a “deal closing fund” that can be used for a variety of economic development projects, was appropriated an additional $20 million to incentivize large foreign and out-of-state businesses to move jobs to Texas.
The Texas Legislature established the TEF in 2003 as a means of providing financial resources to attract new businesses to the state and assist existing businesses with substantial expansion efforts.
The Emerging Technology Fund (ETF) also saw its funds replenished. The ETF, established to promote the commercialization of innovative technological ideas and products which will have a substantial impact on the Texas economy, received an additional $94 million.
San Antonio will soon reap the benefits of this fund. In July, the Governor’s Office announced the ETF’s investment in five San Antonio-area companies.
Finally, the Film Incentives Fund, used to attract feature film and television projects to the state, will also receive additional funding as a result of the 81st Legislative Session. Funding for the state’s film incentive program has been increased from $20 million to $60 million.
There’s no question that 2009 was all about the economy. Because of this, it’s no wonder that tax relief, job creation and economic development took on added significance during the 81st Legislative Session.
