By: Hilderbran H.B. No. 3386
A BILL TO BE ENTITLED
AN ACT
relating to the transferability of certain unused credits under the
Texas Franchise Tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (e) and (f), Section 18, Chapter 1
(H.B. 3) Acts of the 79th Legislature, 3rd Called Session, 2006, are
amended to read as follows:
(e) A corporation that has any unused credits established
before the effective date of this Act under Subchapter P, Chapter
171, Tax Code, may claim those unused credits on or with the tax
report for the period in which the credit was established. However,
if the corporation was allowed to carry forward unused credits
under that subchapter, the corporation may continue to apply those
credits on or with each consecutive report until the earlier of the
date the credit would have expired under the terms of Subchapter P,
Chapter 171, Tax Code, had it continued in existence, or December
31, 2016, and the former law under which the corporation
established the credits is continued in effect for purposes of
determining the amount of the credits the corporation may claim and
the manner in which the corporation may claim the credit[.],
provided, however, that the corporation also may transfer the
unused credits by requesting a certificate of transferability of
credit from the Comptroller's Office for the unexpired amount of
credit not previously claimed. A transferability certificate so
issued may be transferred or sold by the recipient to another Texas
taxpayer. Transferors and sellers shall submit to the Comptroller's
Office a notification of any transfer or sale of tax credits within
30 days after the transfer or sale of those tax credits. The
notification, which shall be in the form prescribed by the
Comptroller's Office, shall include the transferor's tax credit
balance prior to transfer, the credit certificate number, the
transferor's remaining tax credit balance after transfer, all tax
identification numbers for both transferor and transferee, the date
of transfer, the amount transferred, a copy of the credit
certificate, and any other information required by the
Comptroller's Office. The transfer or sale of the credit does not
extend the time in which the credit can be used. The carry forward
period for a credit that is transferred or sold begins on the date
on which the credit was originally granted by the Comptroller's
Office. To the extent the transferor did not have rights to claim or
use the credit at the time of the transfer or sale, the
Comptroller's Office shall either disallow the credit claimed by
the transferee or recapture the credit from the transferee through
any collection method authorized by statute. In such case, the
transferee's recourse is against the transferor.
(f) A corporation that has any unused credits established
before the effective date of this Act under Subchapter Q, Chapter
171, Tax Code, may claim those unused credits on or with the tax
report for the period in which the credit was established. However,
if the corporation was allowed to carry forward unused credits
under that subchapter, the corporation may continue to apply those
credits on or with each consecutive report until the earlier of the
date the credit would have expired under the terms of Subchapter P,
Chapter 171, Tax Code, had it continued in existence, or December
31, 2016, and the former law under which the corporation
established the credits is continued in effect for purposes of
determining the amount of the credits the corporation may claim and
the manner in which the corporation may claim the credit[.],
provided, however, that the corporation also may transfer the
unused credits by requesting a certificate of transferability of
credit from the Comptroller's Office for the unexpired amount of
credit not previously claimed. A transferability certificate so
issued may be transferred or sold by the recipient to another Texas
taxpayer. Transferors and sellers shall submit to the Comptroller's
Office a notification of any transfer or sale of tax credits within
30 days after the transfer or sale of those tax credits. The
notification, which shall be in the form prescribed by the
Comptroller's Office, shall include the transferor's tax credit
balance prior to transfer, the credit certificate number, the
transferor's remaining tax credit balance after transfer, all tax
identification numbers for both transferor and transferee, the date
of transfer, the amount transferred, a copy of the credit
certificate, and any other information required by the
Comptroller's Office. The transfer or sale of the credit does not
extend the time in which the credit can be used. The carry forward
period for a credit that is transferred or sold begins on the date
on which the credit was originally granted by the Comptroller's
Office. To the extent the transferor did not have rights to claim or
use the credit at the time of the transfer or sale, the
Comptroller's Office shall either disallow the credit claimed by
the transferee or recapture the credit from the transferee through
any collection method authorized by statute. In such case, the
transferee's recourse is against the transferor.
SECTION 2. This Act shall take effect on January 1, 2014.