Phases-out the corporation franchise tax beginning January 1, 2019 (EG -$416,000,000 GF RV See Note)
Impact
The potential impact of HB 361 on state laws is significant as it directly alters the financial obligations of corporations within the state. By phasing out the franchise tax, the state aims to reallocate the financial burdens associated with business taxation, which could lead to a more substantial economic growth period. However, this change raises questions about future state revenue, as the reduction in corporate tax income may necessitate adjustments in other areas of the budget or tax system to compensate for the lost revenue.
Summary
House Bill 361 seeks to phase out the corporation franchise tax, which is a tax levied on businesses operating within the state. The bill proposes to eliminate this tax starting from January 1, 2019, with the aim of fostering a more favorable economic environment for businesses. Proponents of the bill argue that the removal of this tax will encourage economic growth and investment within the state, making it a more attractive destination for both local and out-of-state businesses. The financial implications suggested that removing this tax could lead to significant savings for corporations, thereby benefiting their operations and profitability.
Sentiment
The sentiment surrounding HB 361 appears to be largely supportive among business advocates and some legislative members, reflecting a common desire to stimulate economic growth. However, concerns have been raised by opponents who fear that such a tax change could lead to cuts in essential state services due to reduced revenue. Critics argue that the bill is a short-term solution that favors corporate interests while undermining the state’s ability to provide necessary services to its residents.
Contention
Notable points of contention regarding HB 361 center on the potential negative implications for state funding and the reliance on corporate taxes to support public services. Opponents of the bill argue that eliminating the franchise tax, while beneficial for businesses, could lead to increased financial strain on state resources, especially in public education, healthcare, and infrastructure. The discussion highlights a classic debate between economic incentives for businesses versus the need for stable and adequate funding for state services.
Provides for the suspension of the corporation franchise tax and initial corporation franchise tax for small business corporations. (Item #16) (gov sig) (EN -$7,500,000 GF RV See Note)
Suspends the corporation franchise tax levied on certain taxable capital and suspends the initial corporation franchise tax levied on certain entities (Item #16) (EG -$10,200,000 GF RV See Note)
Postpones the termination of a tax credit for C-corporations for local inventory taxes paid but reduces the amount of the credit for those taxpayers (EG1 -$130,000,000 SD RV See Note)