House Bill 3928 was a clean-up bill that corrected some technical issues found in the statutes of Texas’ new Margin Tax, a tax that will replace the old franchise tax system. It also included a new provision that will allow small businesses with annual total revenue between $300,000 and $900,000 to pay a discounted tax. Businesses with revenue of less than $300,000 will still be exempt from paying the tax. Unfortunately, there are some bills that did not pass that would have helped the state’s technology industry. These include:
- Legislation that would have expanded the manufacturing equipment sales tax exemption to include research and development equipment.
- Legislation that would have instituted a statutory requirement for the legislature to increase the Technology Allotment Fund and provide more money for public schools to access technology resources. However, the legislature appropriated $115 million more in fiscal years 2008-2009 for the Technology Allotment Fund than it did in fiscal years 2006-2007.
- Legislation that would have expanded the Texas Economic Development Act to include data centers.
Several other bills that could have harmed the state’s technology industry were not passed by the Texas Legislature. These include bills that would have:
- Prohibited school districts from requiring a student to use an identification device that uses Radio Frequency Identification Technology (RFID).
- Required the state to adopt energy efficiency standards on electronic products. (Federal standards are already being developed in this area.)
- Changed the manner in which research and development expenses are accounted for in the new Margin Tax to mandate that such expenses only be deducted when tied to a cost resulting in a final product.