81R851 KLA-D
By: Shapleigh S.B. No. 323
A BILL TO BE ENTITLED
AN ACT
relating to the franchise tax liability of certain taxable entities
during an initial period of operation.
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
DURING INITIAL PERIOD OF OPERATION. (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
chartered or organized under the laws of this state, another state,
or the United States is not required to pay any tax and is not
considered to owe any tax for a period if:
(1) any part of the period is earlier than the third
anniversary of the date the entity's charter or organization took
effect; and
(2) 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 only if the constitutional
amendment proposed by the 81st Legislature, Regular Session, 2009,
providing that Section 24, Article VIII, Texas Constitution, does
not apply to a tax imposed on certain business entities is approved
by the voters. If that amendment is not approved by the voters,
this Act has no effect.
SECTION 5. Except as otherwise provided by this Act, this
Act takes effect January 1, 2010.