Texas Insider Report: AUSTIN, Texas – “Texas’ positive business climate, including the $1 million Franchise Tax Exemption, has helped keep unemployment below the national average and job-creation above it,” said Texas House Ways & Means Committee Chairman Harvey Hilderbran.
“Permanently extending the exemption will help attract new businesses to the state, and encourage growth of those already here.”
The Texas House Ways & Means Committee Chairman filed his bill, House Bill 213, to promote Texas small business development by permanently extending a tax exemption for companies that earn less than $1 million a year.
“The 2.2 million small businesses in Texas are responsible for creating the vast majority of jobs in our state,” Hilderbran (R-Kerrville) said.
“Keeping taxes low and maintaining an employer-friendly environment has helped make Texas a leader in job creation, and extending the franchise tax exemption we first enacted three years ago will help keep us there.”
In 2009, the Texas Legislature temporarily raised the franchise tax revenue exemption for small businesses to $1 million, offering tax relief to nearly 40,000 additional small businesses across the state.
Hilderbran filed legislation in 2011 to make that exemption permanent, but – despite strong support from Gov. Rick Perry and the business community – the legislative session ended before the full House voted on the issue. Hilderbran, however, was able to amend legislation that extended the $1 million exemption through the end of 2013.
In the 12 months prior to September, Texas added 270,000 jobs to its payroll, growing at a rate of 3.1%. The U.S. growth rate for that same period was only 1.7%.
A year after the legislature passed the 2009 exemption, the U.S. Department of Commerce reported that Texas created more jobs than any other state, and the Wall Street Journal credited the state’s low taxes and employer-friendly environment with helping make Texas the “job creation capital” of the nation.
Hilderbran, who serves as chairman of the House Ways and Means Committee, said the committee will approve his bill early in the 2013 legislative session. The legislation is House Bill 213.
“I am proud that Texas has led the nation in job growth, but I know that we can create even more jobs and get unemployment even lower, so I’m dedicated to making sure this bill gets through the 2013 session,” Hilderbran said.
Earlier this month, Hilderbran talked with Texas Insider’s Jim Cardle about Texas’ Budget & Economic Outlook for the coming 2013 Session, including the “Rainy Day Fund,” saying, “If we maintain our 12% growth rate, but (for budget planning purposes forecast growth) at only a 5-6% level, that by itself leaves us with at least a $6 billion General Revenue Surplus as we enter the 2013 Session.
As Chairman of the Texas House’s powerful tax-writing Ways & Means Committee, Hilderbran predicted, “If we continue on at just a 5-or-6% growth rate, just in this year that we’re in, we will have very good news for state education, and very good news for our state’s finances.”
“Its because of the conservative policies we made in 2011, the very difficult decisions we made when we were criticized for cutting too much,” Hilderbran said.