81R10502 KLA-D
By: King of Parker H.B. No. 3935
A BILL TO BE ENTITLED
AN ACT
relating to the classification of certain entities as primarily
engaged in retail or wholesale trade for purposes of the franchise
tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.002(c), Tax Code, is amended to read
as follows:
(c) A taxable entity is primarily engaged in retail or
wholesale trade only if:
(1) the total revenue from its activities in retail or
wholesale trade is greater than the total revenue from its
activities in trades other than the retail and wholesale trades;
(2) except as provided by Subsection (c-1), less than
50 percent of the total revenue from activities in retail or
wholesale trade comes from the sale of products it produces or
products produced by an entity that is part of an affiliated group
to which the taxable entity also belongs; and
(3) the taxable entity does not provide retail or
wholesale utilities, including [telecommunications services,]
electricity[,] or gas, but not including telecommunications
services.
SECTION 2. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2010.