| 1 | 1 | | 81R6799 JE-D |
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| 2 | 2 | | By: Button H.B. No. 1116 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to tax incentives for certain businesses for job creation |
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| 8 | 8 | | and retention. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Chapter 111, Tax Code, is amended by adding |
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| 11 | 11 | | Subchapter H to read as follows: |
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| 12 | 12 | | SUBCHAPTER H. BUSINESS TAX INCENTIVES FOR CERTAIN JOB CREATION AND |
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| 13 | 13 | | RETENTION ACTIVITIES |
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| 14 | 14 | | Sec. 111.401. ENTITLEMENT TO TAX REFUND OR CREDIT. (a) A |
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| 15 | 15 | | qualified business is entitled to a refund of or credit against |
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| 16 | 16 | | state sales and use taxes imposed under Chapter 151 and state |
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| 17 | 17 | | franchise taxes imposed under Chapter 171. |
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| 18 | 18 | | (b) The total amount of the refund or credit a qualified |
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| 19 | 19 | | business claims in a calendar year may not exceed the amount of net |
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| 20 | 20 | | state sales and use taxes and franchise taxes paid by the business, |
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| 21 | 21 | | after any other applicable credit, in the calendar year for which |
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| 22 | 22 | | the refund or credit is requested. |
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| 23 | 23 | | Sec. 111.402. TYPES OF BUSINESSES THAT QUALIFY FOR TAX |
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| 24 | 24 | | REFUND OR CREDIT. A business qualifies for a tax refund or credit |
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| 25 | 25 | | under this subchapter if the total wages and salaries paid in this |
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| 26 | 26 | | state by the business during the calendar year for which the refund |
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| 27 | 27 | | or credit is requested exceed the total wages and salaries paid in |
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| 28 | 28 | | this state during the previous calendar year. |
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| 29 | 29 | | Sec. 111.403. COMPUTATION OF REFUND OR CREDIT. The total |
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| 30 | 30 | | amount of the refund or credit to which a qualifying business is |
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| 31 | 31 | | entitled under this subchapter is computed by: |
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| 32 | 32 | | (1) determining the total wages and salaries paid in |
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| 33 | 33 | | this state by the business during the calendar year for which the |
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| 34 | 34 | | refund or credit is requested; |
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| 35 | 35 | | (2) subtracting from the amount determined under |
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| 36 | 36 | | Subdivision (1) the average total wages and salaries paid in this |
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| 37 | 37 | | state by the business during: |
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| 38 | 38 | | (A) the three calendar years preceding the |
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| 39 | 39 | | calendar year for which the refund or credit is requested, if the |
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| 40 | 40 | | qualifying business was paying wages and salaries in this state |
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| 41 | 41 | | during that period; or |
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| 42 | 42 | | (B) the period preceding the first day of the |
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| 43 | 43 | | calendar year for which the refund or credit is requested and during |
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| 44 | 44 | | which the business was paying wages and salaries in this state, if |
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| 45 | 45 | | the business was paying wages and salaries in this state for less |
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| 46 | 46 | | than three years preceding the first day of the calendar year for |
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| 47 | 47 | | which the refund or credit is requested; |
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| 48 | 48 | | (3) subtracting $200,000 from the amount determined |
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| 49 | 49 | | under Subdivision (2); and |
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| 50 | 50 | | (4) multiplying the result of Subdivisions (1)-(3) by |
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| 51 | 51 | | five percent. |
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| 52 | 52 | | Sec. 111.404. PROCEDURE FOR CLAIMING REFUND OR CREDIT. (a) |
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| 53 | 53 | | An application for a refund or credit must be made to the |
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| 54 | 54 | | comptroller on a form prescribed by the comptroller. |
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| 55 | 55 | | (b) A qualified business must provide to the comptroller any |
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| 56 | 56 | | information the comptroller needs to determine the validity of an |
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| 57 | 57 | | application. The burden of establishing entitlement to and the |
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| 58 | 58 | | value of the refund or credit is on the business. |
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| 59 | 59 | | (c) Except as provided by Subsection (d), a qualified |
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| 60 | 60 | | business must apply for a refund or credit under this subchapter |
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| 61 | 61 | | before August 1 of the year after the calendar year for which the |
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| 62 | 62 | | business requests the refund or credit. |
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| 63 | 63 | | (d) If a business requests a credit against franchise taxes |
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| 64 | 64 | | under this subchapter, the business must claim the credit on or with |
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| 65 | 65 | | the report for the accounting period in which the wages and salaries |
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| 66 | 66 | | are paid. |
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| 67 | 67 | | (e) A refund payable under this subchapter does not earn |
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| 68 | 68 | | interest. |
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| 69 | 69 | | Sec. 111.405. COMPTROLLER POWERS AND DUTIES. (a) The |
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| 70 | 70 | | comptroller shall adopt rules and forms for the administration of |
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| 71 | 71 | | this subchapter. |
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| 72 | 72 | | (b) The comptroller may conduct any audit the comptroller |
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| 73 | 73 | | determines necessary for the enforcement or administration of this |
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| 74 | 74 | | subchapter. |
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| 75 | 75 | | SECTION 2. This Act takes effect January 1, 2010. |
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