| 1 | 1 | | 81R25666 JE-F |
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| 2 | 2 | | By: Oliveira H.B. No. 3927 |
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| 3 | 3 | | Substitute the following for H.B. No. 3927: |
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| 4 | 4 | | By: Oliveira C.S.H.B. No. 3927 |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the computation of taxable margin for purposes of the |
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| 10 | 10 | | franchise tax by a taxable entity principally engaged in Internet |
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| 11 | 11 | | hosting. |
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| 12 | 12 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 13 | 13 | | SECTION 1. Section 171.0001, Tax Code, is amended by adding |
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| 14 | 14 | | Subdivision (9-a) to read as follows: |
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| 15 | 15 | | (9-a) "Internet hosting" means providing for |
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| 16 | 16 | | consideration to an unrelated user access over the Internet to |
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| 17 | 17 | | computer servers on which the users process the users' own data and |
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| 18 | 18 | | that are owned or leased and managed by the provider, and that are |
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| 19 | 19 | | located in a remote, secure data center that is owned or leased by |
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| 20 | 20 | | the provider. The term does not include telecommunications |
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| 21 | 21 | | services. For purposes of this subdivision, a computer server is |
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| 22 | 22 | | managed by the entity that provides, under contract with the user: |
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| 23 | 23 | | (A) the operating system license and |
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| 24 | 24 | | installation and maintenance for the server; |
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| 25 | 25 | | (B) redundant electric power for the server and |
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| 26 | 26 | | for the secure data center; |
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| 27 | 27 | | (C) redundant Internet access for the server; and |
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| 28 | 28 | | (D) hardware maintenance for the server. |
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| 29 | 29 | | SECTION 2. Section 171.106, Tax Code, is amended by adding |
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| 30 | 30 | | Subsections (g) and (h) to read as follows: |
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| 31 | 31 | | (g) For a taxable entity receiving more than 75 percent of |
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| 32 | 32 | | its total revenue from Internet hosting, a receipt from Internet |
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| 33 | 33 | | hosting is a receipt from business done in this state if the |
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| 34 | 34 | | customer to whom the service is provided is located in this state. |
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| 35 | 35 | | Except as provided by Subsection (h), this subsection takes effect |
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| 36 | 36 | | for reports due on or after January 1, 2015. |
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| 37 | 37 | | (h) On or before December 1 of each year, the comptroller |
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| 38 | 38 | | shall evaluate the statewide fiscal impact of the implementation of |
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| 39 | 39 | | Subsection (g). If after an evaluation the comptroller determines |
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| 40 | 40 | | that implementation of Subsection (g) will not have a negative |
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| 41 | 41 | | fiscal impact on this state, Subsection (g) takes effect for each |
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| 42 | 42 | | report originally due on or after January 1 of the year following |
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| 43 | 43 | | the year in which the comptroller makes that determination. This |
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| 44 | 44 | | subsection expires December 2, 2013. |
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| 45 | 45 | | SECTION 3. This Act applies only to a report originally due |
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| 46 | 46 | | on or after the effective date of this Act. |
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| 47 | 47 | | SECTION 4. This Act takes effect September 1, 2009. |
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