Texas 2015 - 84th Regular

Texas House Bill HB1314 Compare Versions

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1	1	84R6077 TJB-D
2	2	By: Bohac H.B. No. 1314
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the phaseout and repeal of the franchise tax; lowering
8	8	the rates of the tax.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. (a) Effective January 1, 2016, Sections
11	11	171.002(a) and (b), Tax Code, are amended to read as follows:
12	12	(a) Subject to Sections 171.003 and 171.1016 and except as
13	13	provided by Subsection (b), the rate of the franchise tax is 0.9
14	14	[one] percent of taxable margin.
15	15	(b) Subject to Sections 171.003 and 171.1016, the rate of
16	16	the franchise tax is 0.45 [0.5] percent of taxable margin for those
17	17	taxable entities primarily engaged in retail or wholesale trade.
18	18	(b) This section applies only to a report originally due on
19	19	or after January 1, 2016.
20	20	SECTION 2. (a) Effective January 1, 2017, Sections
21	21	171.002(a) and (b), Tax Code, are amended to read as follows:
22	22	(a) Subject to Sections 171.003 and 171.1016 and except as
23	23	provided by Subsection (b), the rate of the franchise tax is 0.8
24	24	[one] percent of taxable margin.
25	25	(b) Subject to Sections 171.003 and 171.1016, the rate of
26	26	the franchise tax is 0.4 [0.5] percent of taxable margin for those
27	27	taxable entities primarily engaged in retail or wholesale trade.
28	28	(b) This section applies only to a report originally due on
29	29	or after January 1, 2017.
30	30	SECTION 3. (a) Effective January 1, 2018, Sections
31	31	171.002(a) and (b), Tax Code, are amended to read as follows:
32	32	(a) Subject to Sections 171.003 and 171.1016 and except as
33	33	provided by Subsection (b), the rate of the franchise tax is 0.7
34	34	[one] percent of taxable margin.
35	35	(b) Subject to Sections 171.003 and 171.1016, the rate of
36	36	the franchise tax is 0.35 [0.5] percent of taxable margin for those
37	37	taxable entities primarily engaged in retail or wholesale trade.
38	38	(b) This section applies only to a report originally due on
39	39	or after January 1, 2018.
40	40	SECTION 4. (a) Effective January 1, 2019, Sections
41	41	171.002(a) and (b), Tax Code, are amended to read as follows:
42	42	(a) Subject to Sections 171.003 and 171.1016 and except as
43	43	provided by Subsection (b), the rate of the franchise tax is 0.6
44	44	[one] percent of taxable margin.
45	45	(b) Subject to Sections 171.003 and 171.1016, the rate of
46	46	the franchise tax is 0.3 [0.5] percent of taxable margin for those
47	47	taxable entities primarily engaged in retail or wholesale trade.
48	48	(b) This section applies only to a report originally due on
49	49	or after January 1, 2019.
50	50	SECTION 5. (a) Effective January 1, 2020, Sections
51	51	171.002(a) and (b), Tax Code, are amended to read as follows:
52	52	(a) Subject to Sections 171.003 and 171.1016 and except as
53	53	provided by Subsection (b), the rate of the franchise tax is 0.5
54	54	[one] percent of taxable margin.
55	55	(b) Subject to Sections 171.003 and 171.1016, the rate of
56	56	the franchise tax is 0.25 [0.5] percent of taxable margin for those
57	57	taxable entities primarily engaged in retail or wholesale trade.
58	58	(b) This section applies only to a report originally due on
59	59	or after January 1, 2020.
60	60	SECTION 6. (a) Effective January 1, 2021, Sections
61	61	171.002(a) and (b), Tax Code, are amended to read as follows:
62	62	(a) Subject to Sections 171.003 and 171.1016 and except as
63	63	provided by Subsection (b), the rate of the franchise tax is 0.4
64	64	[one] percent of taxable margin.
65	65	(b) Subject to Sections 171.003 and 171.1016, the rate of
66	66	the franchise tax is 0.2 [0.5] percent of taxable margin for those
67	67	taxable entities primarily engaged in retail or wholesale trade.
68	68	(b) This section applies only to a report originally due on
69	69	or after January 1, 2021.
70	70	SECTION 7. (a) Effective January 1, 2022, Sections
71	71	171.002(a) and (b), Tax Code, are amended to read as follows:
72	72	(a) Subject to Sections 171.003 and 171.1016 and except as
73	73	provided by Subsection (b), the rate of the franchise tax is 0.3
74	74	[one] percent of taxable margin.
75	75	(b) Subject to Sections 171.003 and 171.1016, the rate of
76	76	the franchise tax is 0.15 [0.5] percent of taxable margin for those
77	77	taxable entities primarily engaged in retail or wholesale trade.
78	78	(b) This section applies only to a report originally due on
79	79	or after January 1, 2022.
80	80	SECTION 8. (a) Effective January 1, 2023, Sections
81	81	171.002(a) and (b), Tax Code, are amended to read as follows:
82	82	(a) Subject to Sections 171.003 and 171.1016 and except as
83	83	provided by Subsection (b), the rate of the franchise tax is 0.2
84	84	[one] percent of taxable margin.
85	85	(b) Subject to Sections 171.003 and 171.1016, the rate of
86	86	the franchise tax is 0.1 [0.5] percent of taxable margin for those
87	87	taxable entities primarily engaged in retail or wholesale trade.
88	88	(b) This section applies only to a report originally due on
89	89	or after January 1, 2023.
90	90	SECTION 9. (a) Effective January 1, 2024, Sections
91	91	171.002(a) and (b), Tax Code, are amended to read as follows:
92	92	(a) Subject to Sections 171.003 and 171.1016 and except as
93	93	provided by Subsection (b), the rate of the franchise tax is 0.1
94	94	[one] percent of taxable margin.
95	95	(b) Subject to Sections 171.003 and 171.1016, the rate of
96	96	the franchise tax is 0.05 [0.5] percent of taxable margin for those
97	97	taxable entities primarily engaged in retail or wholesale trade.
98	98	(b) This section applies only to a report originally due on
99	99	or after January 1, 2024.
100	100	SECTION 10. (a) Effective January 1, 2016, Section
101	101	171.1016(b), Tax Code, is amended to read as follows:
102	102	(b) The amount of the tax for which a taxable entity that
103	103	elects to pay the tax as provided by this section is liable is
104	104	computed by:
105	105	(1) determining the taxable entity's total revenue
106	106	from its entire business, as determined under Section 171.1011;
107	107	(2) apportioning the amount computed under
108	108	Subdivision (1) to this state, as provided by Section 171.106, to
109	109	determine the taxable entity's apportioned total revenue; and
110	110	(3) multiplying the amount computed under Subdivision
111	111	(2) by the rate of 0.518 [0.575] percent.
112	112	(b) This section applies only to a report originally due on
113	113	or after January 1, 2016.
114	114	SECTION 11. (a) Effective January 1, 2017, Section
115	115	171.1016(b), Tax Code, is amended to read as follows:
116	116	(b) The amount of the tax for which a taxable entity that
117	117	elects to pay the tax as provided by this section is liable is
118	118	computed by:
119	119	(1) determining the taxable entity's total revenue
120	120	from its entire business, as determined under Section 171.1011;
121	121	(2) apportioning the amount computed under
122	122	Subdivision (1) to this state, as provided by Section 171.106, to
123	123	determine the taxable entity's apportioned total revenue; and
124	124	(3) multiplying the amount computed under Subdivision
125	125	(2) by the rate of 0.46 [0.575] percent.
126	126	(b) This section applies only to a report originally due on
127	127	or after January 1, 2017.
128	128	SECTION 12. (a) Effective January 1, 2018, Section
129	129	171.1016(b), Tax Code, is amended to read as follows:
130	130	(b) The amount of the tax for which a taxable entity that
131	131	elects to pay the tax as provided by this section is liable is
132	132	computed by:
133	133	(1) determining the taxable entity's total revenue
134	134	from its entire business, as determined under Section 171.1011;
135	135	(2) apportioning the amount computed under
136	136	Subdivision (1) to this state, as provided by Section 171.106, to
137	137	determine the taxable entity's apportioned total revenue; and
138	138	(3) multiplying the amount computed under Subdivision
139	139	(2) by the rate of 0.403 [0.575] percent.
140	140	(b) This section applies only to a report originally due on
141	141	or after January 1, 2018.
142	142	SECTION 13. (a) Effective January 1, 2019, Section
143	143	171.1016(b), Tax Code, is amended to read as follows:
144	144	(b) The amount of the tax for which a taxable entity that
145	145	elects to pay the tax as provided by this section is liable is
146	146	computed by:
147	147	(1) determining the taxable entity's total revenue
148	148	from its entire business, as determined under Section 171.1011;
149	149	(2) apportioning the amount computed under
150	150	Subdivision (1) to this state, as provided by Section 171.106, to
151	151	determine the taxable entity's apportioned total revenue; and
152	152	(3) multiplying the amount computed under Subdivision
153	153	(2) by the rate of 0.345 [0.575] percent.
154	154	(b) This section applies only to a report originally due on
155	155	or after January 1, 2019.
156	156	SECTION 14. (a) Effective January 1, 2020, Section
157	157	171.1016(b), Tax Code, is amended to read as follows:
158	158	(b) The amount of the tax for which a taxable entity that
159	159	elects to pay the tax as provided by this section is liable is
160	160	computed by:
161	161	(1) determining the taxable entity's total revenue
162	162	from its entire business, as determined under Section 171.1011;
163	163	(2) apportioning the amount computed under
164	164	Subdivision (1) to this state, as provided by Section 171.106, to
165	165	determine the taxable entity's apportioned total revenue; and
166	166	(3) multiplying the amount computed under Subdivision
167	167	(2) by the rate of 0.288 [0.575] percent.
168	168	(b) This section applies only to a report originally due on
169	169	or after January 1, 2020.
170	170	SECTION 15. (a) Effective January 1, 2021, Section
171	171	171.1016(b), Tax Code, is amended to read as follows:
172	172	(b) The amount of the tax for which a taxable entity that
173	173	elects to pay the tax as provided by this section is liable is
174	174	computed by:
175	175	(1) determining the taxable entity's total revenue
176	176	from its entire business, as determined under Section 171.1011;
177	177	(2) apportioning the amount computed under
178	178	Subdivision (1) to this state, as provided by Section 171.106, to
179	179	determine the taxable entity's apportioned total revenue; and
180	180	(3) multiplying the amount computed under Subdivision
181	181	(2) by the rate of 0.23 [0.575] percent.
182	182	(b) This section applies only to a report originally due on
183	183	or after January 1, 2021.
184	184	SECTION 16. (a) Effective January 1, 2022, Section
185	185	171.1016(b), Tax Code, is amended to read as follows:
186	186	(b) The amount of the tax for which a taxable entity that
187	187	elects to pay the tax as provided by this section is liable is
188	188	computed by:
189	189	(1) determining the taxable entity's total revenue
190	190	from its entire business, as determined under Section 171.1011;
191	191	(2) apportioning the amount computed under
192	192	Subdivision (1) to this state, as provided by Section 171.106, to
193	193	determine the taxable entity's apportioned total revenue; and
194	194	(3) multiplying the amount computed under Subdivision
195	195	(2) by the rate of 0.173 [0.575] percent.
196	196	(b) This section applies only to a report originally due on
197	197	or after January 1, 2022.
198	198	SECTION 17. (a) Effective January 1, 2023, Section
199	199	171.1016(b), Tax Code, is amended to read as follows:
200	200	(b) The amount of the tax for which a taxable entity that
201	201	elects to pay the tax as provided by this section is liable is
202	202	computed by:
203	203	(1) determining the taxable entity's total revenue
204	204	from its entire business, as determined under Section 171.1011;
205	205	(2) apportioning the amount computed under
206	206	Subdivision (1) to this state, as provided by Section 171.106, to
207	207	determine the taxable entity's apportioned total revenue; and
208	208	(3) multiplying the amount computed under Subdivision
209	209	(2) by the rate of 0.115 [0.575] percent.
210	210	(b) This section applies only to a report originally due on
211	211	or after January 1, 2023.
212	212	SECTION 18. (a) Effective January 1, 2024, Section
213	213	171.1016(b), Tax Code, is amended to read as follows:
214	214	(b) The amount of the tax for which a taxable entity that
215	215	elects to pay the tax as provided by this section is liable is
216	216	computed by:
217	217	(1) determining the taxable entity's total revenue
218	218	from its entire business, as determined under Section 171.1011;
219	219	(2) apportioning the amount computed under
220	220	Subdivision (1) to this state, as provided by Section 171.106, to
221	221	determine the taxable entity's apportioned total revenue; and
222	222	(3) multiplying the amount computed under Subdivision
223	223	(2) by the rate of 0.058 [0.575] percent.
224	224	(b) This section applies only to a report originally due on
225	225	or after January 1, 2024.
226	226	SECTION 19. (a) Chapter 171, Tax Code, is repealed.
227	227	(b) A taxable entity that is subject to the franchise tax
228	228	imposed under Chapter 171, Tax Code, on December 31, 2024, shall
229	229	file a final franchise tax report and pay a transitional tax as
230	230	required by this subsection on or before May 15, 2025. The
231	231	transitional tax is equal to the tax the taxable entity would have
232	232	paid in 2025 under Chapter 171, Tax Code, if Chapter 171, Tax Code,
233	233	had not been repealed. The provisions of Chapter 171, Tax Code,
234	234	relating to the computation and payment of the franchise tax remain
235	235	in effect after the repeal of Chapter 171, Tax Code, by this section
236	236	for the purposes of computing and paying the transitional tax
237	237	required by this subsection.
238	238	(c) Chapter 171, Tax Code, and Subtitle B, Title 2, Tax
239	239	Code, continue to apply to audits, deficiencies, redeterminations,
240	240	and refunds of any tax due or collected under Chapter 171, including
241	241	the tax due as provided by Subsection (b) of this section, until
242	242	barred by limitations.
243	243	(d) The repeal of Chapter 171, Tax Code, does not affect:
244	244	(1) the status of a taxable entity that has had its
245	245	corporate privileges, certificate of authority, certificate of
246	246	organization, certificate of limited partnership, corporate
247	247	charter, or registration revoked, suit filed against it, or a
248	248	receiver appointed under Subchapter F, G, or H of that chapter;
249	249	(2) the ability of the comptroller of public accounts,
250	250	secretary of state, or attorney general to take action against a
251	251	taxable entity under Subchapter F, G, or H of that chapter for
252	252	actions that took place before the repeal; or
253	253	(3) the right of a taxable entity to contest a
254	254	forfeiture, revocation, lawsuit, or appointment of a receiver under
255	255	Subchapter F, G, or H of that chapter.
256	256	(e) This section takes effect January 1, 2025.
257	257	SECTION 20. Except as otherwise provided by this Act, this
258	258	Act applies only to a report originally due on or after the
259	259	effective date of this Act.
260	260	SECTION 21. Except as otherwise provided by this Act, this
261	261	Act takes effect January 1, 2016.