| 1 | 1 | | 84R13305 BEF-F |
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| 2 | 2 | | By: Capriglione H.B. No. 2941 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the computation of wages and cash compensation for |
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| 8 | 8 | | purposes of the franchise tax. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 171.1013(a), Tax Code, is amended to |
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| 11 | 11 | | read as follows: |
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| 12 | 12 | | (a) Except as otherwise provided by this section, "wages and |
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| 13 | 13 | | cash compensation" means the amount entered in the Medicare wages |
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| 14 | 14 | | and tips box of Internal Revenue Service Form W-2 or any subsequent |
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| 15 | 15 | | form with a different number or designation that substantially |
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| 16 | 16 | | provides the same information. The term also includes, to the |
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| 17 | 17 | | extent not included above: |
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| 18 | 18 | | (1) a person's net distributive income from a taxable |
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| 19 | 19 | | entity treated as a partnership for federal income tax purposes, |
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| 20 | 20 | | but only if the person [receiving the distribution] is a natural |
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| 21 | 21 | | person, a professional association owned entirely by natural |
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| 22 | 22 | | persons, or a professional corporation owned entirely by natural |
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| 23 | 23 | | persons, and only if the amount is positive; |
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| 24 | 24 | | (2) a person's net distributive income from limited |
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| 25 | 25 | | liability companies and corporations treated as S corporations for |
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| 26 | 26 | | federal income tax purposes, but only if the person [receiving the |
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| 27 | 27 | | distribution] is a natural person and only if the amount is |
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| 28 | 28 | | positive; |
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| 29 | 29 | | (3) stock awards and stock options deducted for |
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| 30 | 30 | | federal income tax purposes; [and] |
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| 31 | 31 | | (4) a person's net distributive income from a limited |
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| 32 | 32 | | liability company treated as a sole proprietorship for federal |
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| 33 | 33 | | income tax purposes, but only if the person [receiving the |
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| 34 | 34 | | distribution] is a natural person and only if the amount is |
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| 35 | 35 | | positive; and |
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| 36 | 36 | | (5) payroll taxes paid by a taxable entity in |
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| 37 | 37 | | connection with the employment of an officer, director, owner, |
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| 38 | 38 | | partner, or employee. |
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| 39 | 39 | | SECTION 2. This Act applies only to a report originally due |
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| 40 | 40 | | on or after the effective date of this Act. |
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| 41 | 41 | | SECTION 3. This Act takes effect January 1, 2016. |
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