83R9946 CJC-D
By: Zedler H.B. No. 1836
A BILL TO BE ENTITLED
AN ACT
relating to the exclusion of certain flow-through funds by taxable
entities in determining total revenue for purposes of the franchise
tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.0001(13-a), Tax Code, is amended to
read as follows:
(13-a) "Security," for purposes of Sections
[171.1011(g),] 171.1011(g-2)[,] and 171.106(f) only, has the
meaning assigned by Section 475(c)(2), Internal Revenue Code, and
includes instruments described by Sections 475(e)(2)(B), (C), and
(D) of that code.
SECTION 2. Sections 171.1011(f), (h), and (i), Tax Code,
are amended to read as follows:
(f) A taxable entity shall exclude from its total revenue,
to the extent included under Subsection (c)(1)(A), (c)(2)(A), or
(c)(3), flow-through funds that are mandated by law, contract, or
fiduciary duty to be distributed to other entities, including taxes
collected from a third party by the taxable entity and remitted by
the taxable entity to a taxing authority.
(h) If the taxable entity belongs to an affiliated group,
the taxable entity may not exclude payments described by Subsection
(f), [(g),] (g-1), (g-2), (g-3), or (g-4) that are made to entities
that are members of the affiliated group.
(i) A [Except as provided by Subsection (g), a] payment made
under an ordinary contract for the provision of services in the
regular course of business may not be excluded unless the payment
constitutes flow-through funds that may be excluded under
Subsection (f).
SECTION 3. Section 171.1011(g), Tax Code, is repealed.
SECTION 4. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 5. This Act takes effect January 1, 2014.