| 1 | 1 | | 84R776 KLA-D |
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| 2 | 2 | | By: Riddle H.B. No. 525 |
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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 certain |
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| 8 | 8 | | employees. |
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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 R to read as follows: |
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| 12 | 12 | | SUBCHAPTER R. TAX CREDIT FOR WAGES PAID TO CERTAIN EMPLOYEES |
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| 13 | 13 | | Sec. 171.871. ENTITLEMENT TO CREDIT. A taxable entity is |
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| 14 | 14 | | entitled to a credit in the amount and under the conditions provided |
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| 15 | 15 | | by this subchapter against the tax imposed under this chapter. |
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| 16 | 16 | | Sec. 171.872. QUALIFICATION. A taxable entity qualifies |
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| 17 | 17 | | for a credit under this subchapter for each employee who: |
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| 18 | 18 | | (1) begins employment with the taxable entity on or |
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| 19 | 19 | | after September 1, 2015, in a full-time employment position; |
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| 20 | 20 | | (2) is a resident of this state; and |
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| 21 | 21 | | (3) on the date the employee begins employment as |
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| 22 | 22 | | described by Subdivision (1): |
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| 23 | 23 | | (A) had been a resident of this state for the |
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| 24 | 24 | | preceding five-year period; and |
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| 25 | 25 | | (B) had not previously been employed by the |
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| 26 | 26 | | taxable entity. |
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| 27 | 27 | | Sec. 171.873. AMOUNT; LIMITATIONS. (a) The amount of the |
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| 28 | 28 | | credit is 50 percent of the wages paid by the taxable entity for |
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| 29 | 29 | | each employee described by Section 171.872. |
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| 30 | 30 | | (b) A taxable entity may claim the credit only for wages |
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| 31 | 31 | | paid to the employee described by Section 171.872 for a position |
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| 32 | 32 | | located or based in this state. |
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| 33 | 33 | | Sec. 171.874. APPLICATION FOR CREDIT. (a) A taxable entity |
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| 34 | 34 | | must apply for a credit under this subchapter on or with the tax |
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| 35 | 35 | | report for the period for which the credit is claimed. |
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| 36 | 36 | | (b) The comptroller shall promulgate a form for the |
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| 37 | 37 | | application for the credit. A taxable entity must use the form in |
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| 38 | 38 | | applying for the credit. |
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| 39 | 39 | | Sec. 171.875. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A |
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| 40 | 40 | | taxable entity may claim a credit under this subchapter for wages |
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| 41 | 41 | | paid during an accounting period only against the tax owed for the |
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| 42 | 42 | | corresponding privilege period. |
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| 43 | 43 | | SECTION 2. A taxable entity may claim the credit under |
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| 44 | 44 | | Subchapter R, Chapter 171, Tax Code, as added by this Act, only for |
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| 45 | 45 | | wages paid or incurred on or after September 1, 2015, and only on a |
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| 46 | 46 | | franchise tax report due under Chapter 171, Tax Code, on or after |
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| 47 | 47 | | January 1, 2016. |
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| 48 | 48 | | SECTION 3. This Act takes effect January 1, 2016. |
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