84R776 KLA-D
By: Riddle H.B. No. 525
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for wages paid to certain
employees.
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 TO CERTAIN EMPLOYEES
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 for each employee who:
(1) begins employment with the taxable entity on or
after September 1, 2015, in a full-time employment position;
(2) is a resident of this state; and
(3) on the date the employee begins employment as
described by Subdivision (1):
(A) had been a resident of this state for the
preceding five-year period; and
(B) had not previously been employed by the
taxable entity.
Sec. 171.873. AMOUNT; LIMITATIONS. (a) The amount of the
credit is 50 percent of the wages paid by the taxable entity for
each employee described by Section 171.872.
(b) A taxable entity may claim the credit only for wages
paid to the employee described by Section 171.872 for a position
located or based in 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. A taxable entity may claim the credit under
Subchapter R, Chapter 171, Tax Code, as added by this Act, only for
wages paid or incurred on or after September 1, 2015, and only on a
franchise tax report due under Chapter 171, Tax Code, on or after
January 1, 2016.
SECTION 3. This Act takes effect January 1, 2016.