Bill Caption

Relating to an exemption from the franchise tax and certain filing fees for certain businesses owned by veterans during an initial period of operation in the state.

Fiscal Notes

Estimated Two­-year Net Impact to General Revenue Related Funds for SB 938, As Engrossed: a negative impact of ($363,000) through the biennium ending August 31, 2023.

Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($300,000) for the 2022­23 biennium.  Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.

Bill Analysis

SB 938 would waive all filing fees for a new veteran business, as defined by this bill until the earlier of the fifth anniversary of the business' formation or until it no longer qualifies as a new veteran business. The bill would also exempt a new veteran business from franchise taxes until the same span of time has passed.

Vote Recommendation Notes

Texas Action opposes SB 938 because it violates the free market, limited government, and property rights principles.  While we sympathize with the bill's aim to give veterans extra support when they start new business ventures, we do not support this bill because it uses tax and fee exemptions to give preference to a specific class of individuals. The best way to keep taxes low is by ensuring taxes, when necessary are low rate and broad-based. Carving out special exemptions will only increase the tax burden for the remaining taxpayers. Moreover, this bill would give new veteran businesses distinct advantages that would distort the free market.