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Summary: Marine transportation operators that deliver goods are unable to deduct the cost of transporting those goods from their taxable margin to reduce their franchise tax liability. Other entities that transport their own commodities rather than contract with transportation operators, however, may deduct these transportation expenses. As a result, marine operators can’t make deductions similar companies can. HB 1289 would allow marine transportation operators to deduct these costs for purposes of the franchise tax.
Analysis: HB 1289 reduces the tax liabilities of marine transportation operators under the franchise tax. This promotes their property rights by allowing these operators to keep more resources, and it limits the amount government can take from these entities through the franchise tax. This also makes marine transportation operators subject to the same tax burdens as other types of transportation operators. Support HB 1289.