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Summary: HB 800 seeks to change the current law by allowing businesses that are involved in research and development to either receive a franchise tax credit or receive a sales exemption on software and equipment purchased for the purpose of research and development initiatives. The Comptroller's Office will oversee the credits and exemptions to ensure they function as statutorily intended. The purpose of HB 800 is to incentivize the private industry's involvement in research and development in order for this industry to grow in Texas.
Analysis: We support comprehensive tax reform that is visible, broad-based, and low. HB 800 moves in the right direction by removing the tax burden for businesses by providing a tax credit. The fact that there are so many exemptions in existing tax code and in proposed legislation speaks volumes about the unnecessarily complicated tax structure. This legislation helps alleviate the problem by limiting government's scope by at least relieving the tax burden on businesses that support research and development.
The state should work towards eliminating the franchise tax and removing regulatory burdens that inhibit the free market from thriving. As a result, by removing the franchise tax, this would treat all industries fairly while incentivizing businesses to operate in Texas. We encourage legislators to support HB 800 and work towards comprehensive reform.