| 1 | 1 | | 81R8062 KLA-D |
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| 2 | 2 | | By: Jackson, Mike S.B. No. 1037 |
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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 franchise tax liability of certain taxable |
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| 8 | 8 | | entities. |
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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. Subchapter A, Chapter 171, Tax Code, is amended |
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| 11 | 11 | | by adding Section 171.0023 to read as follows: |
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| 12 | 12 | | Sec. 171.0023. TAX LIABILITY OF CERTAIN TAXABLE ENTITIES. |
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| 13 | 13 | | (a) In this section, "taxable income" means: |
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| 14 | 14 | | (1) for a taxable entity treated for federal income |
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| 15 | 15 | | tax purposes as a corporation, the amount reportable as taxable |
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| 16 | 16 | | income on line 30, Internal Revenue Service Form 1120; |
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| 17 | 17 | | (2) for a taxable entity treated for federal income |
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| 18 | 18 | | tax purposes as a partnership, the amount reportable as ordinary |
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| 19 | 19 | | business income or loss on line 22, Internal Revenue Service Form |
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| 20 | 20 | | 1065; or |
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| 21 | 21 | | (3) for a taxable entity other than a taxable entity |
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| 22 | 22 | | treated for federal income tax purposes as a corporation or |
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| 23 | 23 | | partnership, an amount determined in a manner substantially |
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| 24 | 24 | | equivalent to the amount for Subdivision (1) or (2) determined by |
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| 25 | 25 | | rules the comptroller shall adopt. |
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| 26 | 26 | | (b) Except as provided by Subsection (c), a taxable entity |
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| 27 | 27 | | is not required to pay any tax and is not considered to owe any tax |
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| 28 | 28 | | for a period if the taxable entity's taxable income for the period |
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| 29 | 29 | | is zero or less. |
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| 30 | 30 | | (c) Subsection (b) does not apply to a taxable entity that |
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| 31 | 31 | | is a member of a combined group. |
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| 32 | 32 | | (d) Section 171.1011(a) applies to a reference in this |
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| 33 | 33 | | section to an Internal Revenue Service form, and Section |
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| 34 | 34 | | 171.1011(b) applies to a reference in this section to an amount |
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| 35 | 35 | | reportable on a line number on an Internal Revenue Service form. |
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| 36 | 36 | | (e) The comptroller shall adopt rules as necessary to |
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| 37 | 37 | | accomplish the legislative intent prescribed by this section. |
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| 38 | 38 | | SECTION 2. Section 171.204(b), Tax Code, is amended to read |
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| 39 | 39 | | as follows: |
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| 40 | 40 | | (b) The comptroller may require a taxable entity that does |
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| 41 | 41 | | not owe any tax because of the application of Section 171.002(d)(2) |
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| 42 | 42 | | to file an abbreviated information report with the comptroller |
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| 43 | 43 | | stating the amount of the taxable entity's total revenue from its |
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| 44 | 44 | | entire business. The comptroller may require a taxable entity that |
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| 45 | 45 | | does not owe any tax because of the application of Section 171.0023 |
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| 46 | 46 | | to file an abbreviated information report with the comptroller |
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| 47 | 47 | | stating the amount of the taxable entity's taxable income as |
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| 48 | 48 | | defined by that section. The comptroller may not require a taxable |
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| 49 | 49 | | entity described by this subsection to file an information report |
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| 50 | 50 | | that requires the taxable entity to report or compute its margin. |
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| 51 | 51 | | SECTION 3. This Act applies only to a report originally due |
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| 52 | 52 | | on or after the effective date of this Act. |
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| 53 | 53 | | SECTION 4. This Act takes effect January 1, 2010. |
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