| 1 | 1 | | 81R851 KLA-D |
|---|
| 2 | 2 | | By: Shapleigh S.B. No. 323 |
|---|
| 3 | 3 | | |
|---|
| 4 | 4 | | |
|---|
| 5 | 5 | | A BILL TO BE ENTITLED |
|---|
| 6 | 6 | | AN ACT |
|---|
| 7 | 7 | | relating to the franchise tax liability of certain taxable entities |
|---|
| 8 | 8 | | during an initial period of operation. |
|---|
| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|---|
| 10 | 10 | | SECTION 1. Subchapter A, Chapter 171, Tax Code, is amended |
|---|
| 11 | 11 | | by adding Section 171.0023 to read as follows: |
|---|
| 12 | 12 | | Sec. 171.0023. TAX LIABILITY OF CERTAIN TAXABLE ENTITIES |
|---|
| 13 | 13 | | DURING INITIAL PERIOD OF OPERATION. (a) In this section, "taxable |
|---|
| 14 | 14 | | income" means: |
|---|
| 15 | 15 | | (1) for a taxable entity treated for federal income |
|---|
| 16 | 16 | | tax purposes as a corporation, the amount reportable as taxable |
|---|
| 17 | 17 | | income on line 30, Internal Revenue Service Form 1120; |
|---|
| 18 | 18 | | (2) for a taxable entity treated for federal income |
|---|
| 19 | 19 | | tax purposes as a partnership, the amount reportable as ordinary |
|---|
| 20 | 20 | | business income or loss on line 22, Internal Revenue Service Form |
|---|
| 21 | 21 | | 1065; or |
|---|
| 22 | 22 | | (3) for a taxable entity other than a taxable entity |
|---|
| 23 | 23 | | treated for federal income tax purposes as a corporation or |
|---|
| 24 | 24 | | partnership, an amount determined in a manner substantially |
|---|
| 25 | 25 | | equivalent to the amount for Subdivision (1) or (2) determined by |
|---|
| 26 | 26 | | rules the comptroller shall adopt. |
|---|
| 27 | 27 | | (b) Except as provided by Subsection (c), a taxable entity |
|---|
| 28 | 28 | | chartered or organized under the laws of this state, another state, |
|---|
| 29 | 29 | | or the United States is not required to pay any tax and is not |
|---|
| 30 | 30 | | considered to owe any tax for a period if: |
|---|
| 31 | 31 | | (1) any part of the period is earlier than the third |
|---|
| 32 | 32 | | anniversary of the date the entity's charter or organization took |
|---|
| 33 | 33 | | effect; and |
|---|
| 34 | 34 | | (2) the taxable entity's taxable income for the period |
|---|
| 35 | 35 | | is zero or less. |
|---|
| 36 | 36 | | (c) Subsection (b) does not apply to a taxable entity that |
|---|
| 37 | 37 | | is a member of a combined group. |
|---|
| 38 | 38 | | (d) Section 171.1011(a) applies to a reference in this |
|---|
| 39 | 39 | | section to an Internal Revenue Service form, and Section |
|---|
| 40 | 40 | | 171.1011(b) applies to a reference in this section to an amount |
|---|
| 41 | 41 | | reportable on a line number on an Internal Revenue Service form. |
|---|
| 42 | 42 | | (e) The comptroller shall adopt rules as necessary to |
|---|
| 43 | 43 | | accomplish the legislative intent prescribed by this section. |
|---|
| 44 | 44 | | SECTION 2. Section 171.204(b), Tax Code, is amended to read |
|---|
| 45 | 45 | | as follows: |
|---|
| 46 | 46 | | (b) The comptroller may require a taxable entity that does |
|---|
| 47 | 47 | | not owe any tax because of the application of Section 171.002(d)(2) |
|---|
| 48 | 48 | | to file an abbreviated information report with the comptroller |
|---|
| 49 | 49 | | stating the amount of the taxable entity's total revenue from its |
|---|
| 50 | 50 | | entire business. The comptroller may require a taxable entity that |
|---|
| 51 | 51 | | does not owe any tax because of the application of Section 171.0023 |
|---|
| 52 | 52 | | to file an abbreviated information report with the comptroller |
|---|
| 53 | 53 | | stating the amount of the taxable entity's taxable income as |
|---|
| 54 | 54 | | defined by that section. The comptroller may not require a taxable |
|---|
| 55 | 55 | | entity described by this subsection to file an information report |
|---|
| 56 | 56 | | that requires the taxable entity to report or compute its margin. |
|---|
| 57 | 57 | | SECTION 3. This Act applies only to a report originally due |
|---|
| 58 | 58 | | on or after the effective date of this Act. |
|---|
| 59 | 59 | | SECTION 4. This Act takes effect only if the constitutional |
|---|
| 60 | 60 | | amendment proposed by the 81st Legislature, Regular Session, 2009, |
|---|
| 61 | 61 | | providing that Section 24, Article VIII, Texas Constitution, does |
|---|
| 62 | 62 | | not apply to a tax imposed on certain business entities is approved |
|---|
| 63 | 63 | | by the voters. If that amendment is not approved by the voters, |
|---|
| 64 | 64 | | this Act has no effect. |
|---|
| 65 | 65 | | SECTION 5. Except as otherwise provided by this Act, this |
|---|
| 66 | 66 | | Act takes effect January 1, 2010. |
|---|