81R8545 KLA-D
By: Howard of Fort Bend H.B. No. 3944
A BILL TO BE ENTITLED
AN ACT
relating to an exemption from the franchise tax for certain taxable
entities during an initial period of operation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.0001(4), Tax Code, is amended to
read as follows:
(4) "Beginning date" means:
(A) for a taxable entity chartered or organized
in this state, the second anniversary of the date on which the
taxable entity's charter or organization takes effect; and
(B) for any other taxable entity, the later of:
(i) the second anniversary of the date on
which the taxable entity's charter or organization under the laws
of the United States or another state takes effect; or
(ii) the date on which the taxable entity
begins doing business in this state.
SECTION 2. Section 171.001, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) Notwithstanding Subsection (a), the tax imposed under
this chapter is not imposed on a taxable entity until:
(1) for a taxable entity chartered or organized in
this state, the second anniversary of the date the taxable entity's
charter or organization takes effect; or
(2) for a taxable entity chartered or organized under
the laws of the United States or another state, the later of:
(A) the second anniversary of the date the
taxable entity's charter or organization takes effect; or
(B) the date the taxable entity begins doing
business in this state.
SECTION 3. Section 171.063(g), Tax Code, is amended to read
as follows:
(g) If a corporation's federal tax exemption is withdrawn by
the Internal Revenue Service for failure of the corporation to
qualify or maintain its qualification for the exemption, the
corporation's exemption under this section ends on the effective
date of that withdrawal by the Internal Revenue Service. The
effective date of the withdrawal is considered the corporation's
beginning date for purposes of determining the corporation's
privilege periods and for all other purposes of this chapter,
except that if the effective date of the withdrawal is a date
earlier than the second anniversary of the date the corporation's
charter or organization under the laws of this state, another
state, or the United States took effect, the second anniversary of
that effective date is considered the corporation's beginning date
for those purposes.
SECTION 4. Section 171.204, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) The comptroller may require a taxable entity on which
the tax imposed under this chapter is not imposed solely because of
the application of Section 171.001(d) to file an information report
stating the date the taxable entity's charter or organization took
effect and the taxable entity's beginning date. The comptroller
may require the report to include other information the comptroller
determines necessary, except that the comptroller may not require
the taxable entity to report or compute its margin.
SECTION 5. (a) The change in law made by this Act applies to
a taxable entity doing business in this state before, on, or after
the effective date of this Act, regardless of the date the taxable
entity's charter or organization takes effect.
(b) A taxable entity on which the tax under Chapter 171, Tax
Code, was imposed before the effective date of this Act, but on
which the tax is not imposed on the effective date of this Act
because of the application of Section 171.001(d), Tax Code, as
added by this Act, is not entitled to a refund of or credit for taxes
paid under Chapter 171, Tax Code, before the effective date of this
Act.
SECTION 6. This Act takes effect January 1, 2010.