| 1 | 1 | | 81R3920 KLA-F |
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| 2 | 2 | | By: McCall H.B. No. 1999 |
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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 the exclusion of certain amounts from the total revenue |
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| 8 | 8 | | of certain taxable entities for purposes of the franchise tax. |
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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. Section 171.1011, Tax Code, is amended by adding |
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| 11 | 11 | | Subsection (g-5) to read as follows: |
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| 12 | 12 | | (g-5) A taxable entity described by Section |
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| 13 | 13 | | 171.0002(c)(4)(A) and the assets of which, other than real estate |
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| 14 | 14 | | the entity occupies for business purposes, are in direct holdings |
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| 15 | 15 | | of real estate used as a hotel shall exclude from its total revenue, |
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| 16 | 16 | | to the extent included under Subsection (c)(1)(A), (c)(2)(A), or |
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| 17 | 17 | | (c)(3), the operating costs of a hotel occupying that real estate. |
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| 18 | 18 | | For purposes of this subsection: |
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| 19 | 19 | | (1) "Hotel" means a building in which members of the |
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| 20 | 20 | | public obtain sleeping accommodations for consideration and in |
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| 21 | 21 | | relation to which the hotel occupancy tax imposed under Chapter 156 |
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| 22 | 22 | | is required to be collected. The term includes a motel. |
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| 23 | 23 | | (2) "Operating costs of a hotel" means: |
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| 24 | 24 | | (A) direct departmental expenses, including: |
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| 25 | 25 | | (i) wages paid and the cost of benefits |
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| 26 | 26 | | provided to hotel employees; |
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| 27 | 27 | | (ii) costs of hotel supplies; |
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| 28 | 28 | | (iii) laundry expenses; |
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| 29 | 29 | | (iv) travel agent commissions and |
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| 30 | 30 | | reservation costs; |
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| 31 | 31 | | (v) telephone expenses; |
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| 32 | 32 | | (vi) food and beverage costs; and |
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| 33 | 33 | | (vii) all other direct costs incurred in |
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| 34 | 34 | | the business of providing, for consideration, sleeping |
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| 35 | 35 | | accommodations, food and beverage services, and other services |
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| 36 | 36 | | customarily offered at hotels; |
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| 37 | 37 | | (B) unallocated costs, including: |
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| 38 | 38 | | (i) general and administrative costs; |
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| 39 | 39 | | (ii) costs of utility services; |
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| 40 | 40 | | (iii) repair and maintenance costs; |
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| 41 | 41 | | (iv) sales and marketing expenses; |
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| 42 | 42 | | (v) third-party hotel base and incentive |
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| 43 | 43 | | management fees; |
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| 44 | 44 | | (vi) property taxes; |
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| 45 | 45 | | (vii) property and casualty insurance |
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| 46 | 46 | | premiums; |
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| 47 | 47 | | (viii) accident expenses; and |
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| 48 | 48 | | (ix) operating lease expenses; and |
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| 49 | 49 | | (C) allocated central costs of third-party hotel |
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| 50 | 50 | | managers and franchisors, and property improvement fund |
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| 51 | 51 | | contributions. |
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| 52 | 52 | | SECTION 2. This Act applies only to a report originally due |
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| 53 | 53 | | on or after the effective date of this Act. |
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| 54 | 54 | | SECTION 3. This Act takes effect January 1, 2010. |
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