84R9543 KLA-D
By: Kacal H.B. No. 2420
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for wages paid to certain
employees by certain new businesses located in small
municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter R to read as follows:
SUBCHAPTER R. TAX CREDIT FOR WAGES PAID BY CERTAIN
TAXABLE ENTITIES IN SMALL MUNICIPALITIES
Sec. 171.871. ENTITLEMENT TO CREDIT. A taxable entity is
entitled to a credit in the amount and under the conditions provided
by this subchapter against the tax imposed under this chapter.
Sec. 171.872. QUALIFICATION. A taxable entity qualifies
for a credit under this subchapter if the taxable entity:
(1) on or after September 1, 2015:
(A) is chartered or organized; and
(B) first begins doing business in this state in
a municipality with a population of less than 3,000; and
(2) is not substantially similar in ownership and
operation to another entity doing business in the municipality
described by Subdivision (1)(B) before the taxable entity was
chartered or organized.
Sec. 171.873. AMOUNT OF CREDIT. The amount of the credit is
50 percent of the wages paid by the taxable entity before the second
anniversary of the date the taxable entity first began doing
business in a municipality described by Section 171.872(1)(B) to
each employee who:
(1) begins employment with the taxable entity on or
after September 1, 2015, in a full-time employment position that is
located or based in that municipality; and
(2) is a resident of this state.
Sec. 171.874. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the tax
report for the period for which the credit is claimed.
(b) The comptroller shall promulgate a form for the
application for the credit. A taxable entity must use the form in
applying for the credit.
Sec. 171.875. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
taxable entity may claim a credit under this subchapter for wages
paid during an accounting period only against the tax owed for the
corresponding privilege period.
SECTION 2. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2016.