| 1 | 1 | | 84R4833 GRM-D |
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| 2 | 2 | | By: Herrero H.B. No. 3270 |
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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 a franchise tax credit for wages paid to graduates of |
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| 8 | 8 | | certain institutions of higher education. |
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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. Chapter 171, Tax Code, is amended by adding |
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| 11 | 11 | | Subchapter P to read as follows: |
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| 12 | 12 | | SUBCHAPTER P. TAX CREDIT FOR WAGES PAID TO GRADUATES |
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| 13 | 13 | | OF CERTAIN INSTITUTIONS OF HIGHER EDUCATION |
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| 14 | 14 | | Sec. 171.801. DEFINITION. In this subchapter, "public or |
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| 15 | 15 | | private institution of higher education" means an institution of |
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| 16 | 16 | | higher education or a private or independent institution of higher |
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| 17 | 17 | | education as those terms are defined by Section 61.003, Education |
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| 18 | 18 | | Code. |
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| 19 | 19 | | Sec. 171.802. ENTITLEMENT TO CREDIT. A taxable entity is |
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| 20 | 20 | | entitled to a credit in the amount and under the conditions provided |
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| 21 | 21 | | by this subchapter against the tax imposed under this chapter. |
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| 22 | 22 | | Sec. 171.803. QUALIFICATION. A taxable entity qualifies |
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| 23 | 23 | | for a credit under this subchapter for each employee who: |
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| 24 | 24 | | (1) is a graduate of a public or private institution of |
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| 25 | 25 | | higher education at the time the employee is hired if the employee |
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| 26 | 26 | | attended a campus of that institution that is located in the same |
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| 27 | 27 | | county as the county in which the employee performs the employee's |
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| 28 | 28 | | primary job functions; or |
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| 29 | 29 | | (2) graduates from a public or private institution of |
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| 30 | 30 | | higher education during the time the employee is employed with the |
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| 31 | 31 | | taxable entity if the employee attended a campus of that |
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| 32 | 32 | | institution that is located in the same county as the county in |
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| 33 | 33 | | which the employee performs the employee's primary job functions. |
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| 34 | 34 | | Sec. 171.804. AMOUNT; LIMITATIONS. (a) The amount of the |
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| 35 | 35 | | credit is 10 percent of the wages paid by the taxable entity for |
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| 36 | 36 | | each employee described by Section 171.803. |
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| 37 | 37 | | (b) A taxable entity may claim the credit only for wages |
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| 38 | 38 | | paid to the employee described by Section 171.803: |
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| 39 | 39 | | (1) for a position located or based in this state; and |
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| 40 | 40 | | (2) after the employee graduates from the public or |
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| 41 | 41 | | private institution of higher education. |
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| 42 | 42 | | Sec. 171.805. APPLICATION FOR CREDIT. (a) A taxable entity |
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| 43 | 43 | | must apply for a credit under this subchapter on or with the tax |
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| 44 | 44 | | report for the period for which the credit is claimed. |
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| 45 | 45 | | (b) The comptroller shall promulgate a form for the |
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| 46 | 46 | | application for the credit. A taxable entity must use the form in |
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| 47 | 47 | | applying for the credit. |
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| 48 | 48 | | Sec. 171.806. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A |
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| 49 | 49 | | taxable entity may claim a credit under this subchapter for wages |
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| 50 | 50 | | paid during an accounting period only against the tax owed for the |
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| 51 | 51 | | corresponding privilege period. |
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| 52 | 52 | | SECTION 2. A taxable entity may claim the credit under |
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| 53 | 53 | | Subchapter P, Chapter 171, Tax Code, as added by this Act, only for |
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| 54 | 54 | | wages paid or incurred on or after the effective date of this Act |
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| 55 | 55 | | and only on a franchise tax report due under Chapter 171, Tax Code, |
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| 56 | 56 | | on or after January 1, 2016. |
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| 57 | 57 | | SECTION 3. This Act takes effect January 1, 2016. |
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