81R8062 KLA-D
By: Jackson, Mike S.B. No. 1037
A BILL TO BE ENTITLED
AN ACT
relating to the franchise tax liability of certain taxable
entities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 171, Tax Code, is amended
by adding Section 171.0023 to read as follows:
Sec. 171.0023. TAX LIABILITY OF CERTAIN TAXABLE ENTITIES.
(a) In this section, "taxable income" means:
(1) for a taxable entity treated for federal income
tax purposes as a corporation, the amount reportable as taxable
income on line 30, Internal Revenue Service Form 1120;
(2) for a taxable entity treated for federal income
tax purposes as a partnership, the amount reportable as ordinary
business income or loss on line 22, Internal Revenue Service Form
1065; or
(3) for a taxable entity other than a taxable entity
treated for federal income tax purposes as a corporation or
partnership, an amount determined in a manner substantially
equivalent to the amount for Subdivision (1) or (2) determined by
rules the comptroller shall adopt.
(b) Except as provided by Subsection (c), a taxable entity
is not required to pay any tax and is not considered to owe any tax
for a period if the taxable entity's taxable income for the period
is zero or less.
(c) Subsection (b) does not apply to a taxable entity that
is a member of a combined group.
(d) Section 171.1011(a) applies to a reference in this
section to an Internal Revenue Service form, and Section
171.1011(b) applies to a reference in this section to an amount
reportable on a line number on an Internal Revenue Service form.
(e) The comptroller shall adopt rules as necessary to
accomplish the legislative intent prescribed by this section.
SECTION 2. Section 171.204(b), Tax Code, is amended to read
as follows:
(b) The comptroller may require a taxable entity that does
not owe any tax because of the application of Section 171.002(d)(2)
to file an abbreviated information report with the comptroller
stating the amount of the taxable entity's total revenue from its
entire business. The comptroller may require a taxable entity that
does not owe any tax because of the application of Section 171.0023
to file an abbreviated information report with the comptroller
stating the amount of the taxable entity's taxable income as
defined by that section. The comptroller may not require a taxable
entity described by this subsection to file an information report
that requires the taxable entity to report or compute its margin.
SECTION 3. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 4. This Act takes effect January 1, 2010.