Bill Caption

Fiscal Notes

Bill Analysis

Summary: Prior to changes in how insurance companies report their franchise tax liabilities, it was clear that an insurance company from another state that wrote no policies in Texas was not subject to the franchise tax. Recent changes in law have made it unclear whether an out-of-state insurance company can qualify for a franchise tax exemption along with Texas insurance companies. This would protect Texas-based insurance companies from retaliatory taxes in other states and eliminate potential constitutional challenges. HB 3454 seeks to clarify this issue.

Analysis:  HB 3454 clarifies tax law that could otherwise be construed as protectionism on the part of Texas and potentially require the state to defend itself against lawsuits from other states. This legislation supports free markets and limited government. We support HB passage of HB 3454.