81R7131 BEF-D
By: Paxton H.B. No. 1825
A BILL TO BE ENTITLED
AN ACT
relating to the computation of the franchise tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 171.002(a), (b), and (d), Tax Code, are
amended to read as follows:
(a) Subject to Sections 171.003 and 171.1016 and except as
provided by Subsection (b), the rate of the franchise tax is:
(1) for taxable margin of $1 million or less, zero;
(2) for taxable margin that exceeds $1 million but
does not exceed $10 million, 0.5 percent of the taxable margin that
exceeds $1 million; and
(3) for taxable margin that exceeds $10 million,
$45,000 plus one percent of the taxable margin that exceeds $10
million.
(b) Subject to Sections 171.003 and 171.1016, for those
taxable entities primarily engaged in retail or wholesale trade,
the rate of the franchise tax is:
(1) for taxable margin of $1 million or less, zero;
(2) for taxable margin that exceeds $1 million but
does not exceed $10 million, 0.25 percent of the taxable margin that
exceeds $1 million; and
(3) for taxable margin that exceeds $10 million,
$22,500 plus 0.5 percent of the taxable margin that exceeds $10
million [for those taxable entities primarily engaged in retail or
wholesale trade].
(d) A taxable entity is not required to pay any tax and is
not considered to owe any tax for a period if [:
[(1)] the amount of tax computed for the taxable entity
is less than $1,000[; or
[(2) the amount of the taxable entity's total revenue
from its entire business is less than or equal to $300,000 or the
amount determined under Section 171.006 per 12-month period on
which margin is based].
SECTION 2. The heading to Section 171.006, Tax Code, is
amended to read as follows:
Sec. 171.006. ADJUSTMENT OF ELIGIBILITY FOR [NO TAX DUE,
DISCOUNTS, AND] COMPENSATION DEDUCTION.
SECTION 3. Section 171.006(b), Tax Code, is amended to read
as follows:
(b) On [Beginning in 2010, on] January 1 of each
even-numbered year, the amount [amounts] prescribed by Section
[Sections 171.002(d)(2), 171.0021, and] 171.1013(c) is [are]
increased or decreased by an amount equal to the amount prescribed
by that section [those sections] on December 31 of the preceding
year multiplied by the percentage increase or decrease during the
preceding state fiscal biennium in the consumer price index and
rounded to the nearest $10,000.
SECTION 4. Section 171.1015(d), Tax Code, is amended to
read as follows:
(d) Section 171.002(d) does not apply to an upper tier
entity if, before the attribution of any total revenue by a lower
tier entity to an upper tier entity under this section, the lower
tier entity does not meet the criteria of Section 171.002(d)
[171.002(d)(1) or (d)(2)].
SECTION 5. Sections 171.0021, 171.1016(d), and 171.204(b),
Tax Code, are repealed.
SECTION 6. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 7. This Act takes effect January 1, 2010.