83R24452 TJB-F
By: Button, N. Gonzalez of El Paso H.B. No. 1860
Substitute the following for H.B. No. 1860:
By: Hilderbran C.S.H.B. No. 1860
A BILL TO BE ENTITLED
AN ACT
relating to a deduction under the franchise tax for certain
contracts with the federal government.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.101(a), Tax Code, is amended to read
as follows:
(a) The taxable margin of a taxable entity is computed by:
(1) determining the taxable entity's margin, which is
the lesser of:
(A) 70 percent of the taxable entity's total
revenue from its entire business, as determined under Section
171.1011; or
(B) an amount computed by:
(i) determining the taxable entity's total
revenue from its entire business, under Section 171.1011;
(ii) subtracting, at the election of the
taxable entity, either:
(a) cost of goods sold, as determined
under Section 171.1012; or
(b) compensation, as determined under
Section 171.1013; [and]
(iii) subtracting 50 percent of the costs
not already subtracted under Subparagraph (ii)(a) or (b) that are
properly allocable under the Federal Acquisition Regulation (48
C.F.R. Chapter 1, or a successor regulation), to contracts, or
subcontracts supporting those contracts, for the sale of goods or
services to the federal government; and
(iv) subtracting, in addition to any
subtractions made under Subparagraph (ii)(a) or (b), compensation,
as determined under Section 171.1013, paid to an individual during
the period the individual is serving on active duty as a member of
the armed forces of the United States if the individual is a
resident of this state at the time the individual is ordered to
active duty and the cost of training a replacement for the
individual;
(2) apportioning the taxable entity's margin to this
state as provided by Section 171.106 to determine the taxable
entity's apportioned margin; and
(3) subtracting from the amount computed under
Subdivision (2) any other allowable deductions to determine the
taxable entity's taxable margin.
SECTION 2. This Act applies only to a report originally due
on or after January 1, 2014.
SECTION 3. This Act takes effect January 1, 2014.