83R8297 KLA-D
By: Leach H.B. No. 2370
A BILL TO BE ENTITLED
AN ACT
relating to an exemption from the franchise tax for a limited period
following the relocation of a taxable entity to this state from
another state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.0001(4), Tax Code, is amended to
read as follows:
(4) "Beginning date" means:
(A) for a taxable entity chartered or organized
in this state, the date on which the taxable entity's charter or
organization takes effect; and
(B) for any other taxable entity:
(i) [,] the date on which the taxable entity
begins doing business in this state; or
(ii) if the taxable entity concurrently
begins doing business in this state and relocates its main office or
other principal place of business to this state from another state,
the third anniversary of the date on which the taxable entity begins
doing business in this state.
SECTION 2. Section 171.001, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) Notwithstanding Subsection (a), the tax imposed under
this chapter is not imposed on a taxable entity that is chartered or
organized under the laws of the United States or another state and
that concurrently begins doing business in this state and relocates
its main office or other principal place of business to this state
from another state until the third anniversary of the date on which
the taxable entity begins doing business in this state.
SECTION 3. Section 171.063(g), Tax Code, is amended to read
as follows:
(g) If a corporation's federal tax exemption is withdrawn by
the Internal Revenue Service for failure of the corporation to
qualify or maintain its qualification for the exemption, the
corporation's exemption under this section ends on the effective
date of that withdrawal by the Internal Revenue Service. The
effective date of the withdrawal is considered the corporation's
beginning date for purposes of determining the corporation's
privilege periods and for all other purposes of this chapter,
except that if the corporation would have been subject to Section
171.001(d) or exempted from the franchise tax under Section 171.089
in the absence of the federal tax exemption, and the effective date
of the withdrawal is a date earlier than the date the corporation
would have become subject to the franchise tax as provided by
Section 171.001(d) or Section 171.089, as applicable, the date the
corporation would have become subject to the franchise tax under
the applicable provision is considered the corporation's beginning
date for those purposes.
SECTION 4. Subchapter B, Chapter 171, Tax Code, is amended
by adding Section 171.089 to read as follows:
Sec. 171.089. EXEMPTION FOR LIMITED PERIOD: CERTAIN
ENTITIES RELOCATING TO TEXAS. (a) A taxable entity is exempted
from the franchise tax for a period of three years if the taxable
entity:
(1) is chartered or organized under the laws of the
United States or another state;
(2) has been doing business in this state; and
(3) had its main office or principal place of business
located in another state but relocates that main office or other
principal place of business to this state.
(b) The three-year period during which a taxable entity is
exempted from the franchise tax as provided by this section begins
on January 1 of the year following the date the relocation of the
main office or other principal place of business is completed, as
defined by comptroller rules, and ends on the third anniversary of
that date.
SECTION 5. Section 171.204, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) The comptroller may require a taxable entity on which
the tax imposed under this chapter is not imposed solely because of
the application of Section 171.001(d) to file an information report
stating the taxable entity's beginning date as determined under
Section 171.0001(4)(B)(ii). The comptroller may require a taxable
entity exempted from the franchise tax solely because of the
application of Section 171.089 to file an information report
stating the date the relocation of the taxable entity's main office
or other principal place of business was completed, as defined by
comptroller rules. The comptroller may require the report to
include other information the comptroller determines necessary,
except that the comptroller may not require the taxable entity to
report or compute its margin.
SECTION 6. (a) The change in law made by this Act applies to
a taxable entity doing business in this state before, on, or after
the effective date of this Act.
(b) A taxable entity on which the tax under Chapter 171, Tax
Code, was imposed before the effective date of this Act, but on
which the tax is not imposed on the effective date of this Act
because of the application of Section 171.001(d) or 171.089, Tax
Code, as added by this Act, is not entitled to a refund of or credit
for taxes paid under Chapter 171, Tax Code, before the effective
date of this Act.
SECTION 7. This Act takes effect January 1, 2014.