A Message From The Comptroller
January 9, 2001
The Honorable Rick Perry
The Honorable Bill Ratliff
The Honorable James E. "Pete" Laney
Members of the 77th Legislature
As required by the provisions of Tax Code, Sections 171.707, 171.727, 171.759, and 171.809, this report provides information on franchise tax credits enacted by SB 441, 76th Legislature.
The law requires that the Comptroller summarize claims for each tax credit in terms of (1) the credit base, (2) the credit amount taken, (3) the credit amount unused and carried over, (4) the geographic distribution of each credit, and (5) the division of each credit by industrial sector. In addition, the law asks the Comptroller to determine the credits impact on the state economy and on state finance.
The tax credits are available for research conducted, jobs created, investments made, day care spending, and cash donated to before- and after-school programs on or after January 1, 2000. For most taxpayers, the credits can be claimed beginning with tax reports due on May 15, 2001.
To date, the Comptrollers office has received only a handful of tax reports with a tax credit claim. The small number of credit claims received represents an insufficient quantity for an accurate or meaningful analysis of the likely fiscal impact, geographical dispersion, or industry distribution of the credit claims. Because of the lack of reliable credit data, this report draws no conclusions about credit amounts and distributions, or about the economic and fiscal impacts on the state.
Included in this report are an overview of franchise tax features and computation methods, historical data on franchise tax collections and the number of companies paying the tax, overviews of how the credits work, and a map of the Strategic Investment Area for 2001.
Additional franchise tax credit information, including credit computation examples, is available online at http://www.cpa.state.tx.us.
Carole Keeton Rylander
Comptroller of Public Accounts
c: John Keel, CPA, Director, Legislative Budget Board