Texas 2017 - 85th Regular

Texas House Bill HB1095 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R291 TJB-D
2	2	By: Shaheen H.B. No. 1095
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the phaseout and repeal of the franchise tax; lowering
8	8	the rates of the tax.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. (a) Effective January 1, 2018, Sections
11	11	171.002(a) and (b), Tax Code, are amended to read as follows:
12	12	(a) Subject to Sections 171.003 and 171.1016 and except as
13	13	provided by Subsection (b), the rate of the franchise tax is 0.5
14	14	[0.75] percent of taxable margin.
15	15	(b) Subject to Sections 171.003 and 171.1016, the rate of
16	16	the franchise tax is 0.25 [0.375] percent of taxable margin for
17	17	those taxable entities primarily engaged in retail or wholesale
18	18	trade.
19	19	(b) This section applies only to a report originally due on
20	20	or after January 1, 2018.
21	21	SECTION 2. (a) Effective January 1, 2019, Sections
22	22	171.002(a) and (b), Tax Code, are amended to read as follows:
23	23	(a) Subject to Sections 171.003 and 171.1016 and except as
24	24	provided by Subsection (b), the rate of the franchise tax is 0.25
25	25	[0.75] percent of taxable margin.
26	26	(b) Subject to Sections 171.003 and 171.1016, the rate of
27	27	the franchise tax is 0.125 [0.375] percent of taxable margin for
28	28	those taxable entities primarily engaged in retail or wholesale
29	29	trade.
30	30	(b) This section applies only to a report originally due on
31	31	or after January 1, 2019.
32	32	SECTION 3. (a) Effective January 1, 2018, Section
33	33	171.1016(b), Tax Code, is amended to read as follows:
34	34	(b) The amount of the tax for which a taxable entity that
35	35	elects to pay the tax as provided by this section is liable is
36	36	computed by:
37	37	(1) determining the taxable entity's total revenue
38	38	from its entire business, as determined under Section 171.1011;
39	39	(2) apportioning the amount computed under
40	40	Subdivision (1) to this state, as provided by Section 171.106, to
41	41	determine the taxable entity's apportioned total revenue; and
42	42	(3) multiplying the amount computed under Subdivision
43	43	(2) by the rate of 0.22 [0.331] percent.
44	44	(b) This section applies only to a report originally due on
45	45	or after January 1, 2018.
46	46	SECTION 4. (a) Effective January 1, 2019, Section
47	47	171.1016(b), Tax Code, is amended to read as follows:
48	48	(b) The amount of the tax for which a taxable entity that
49	49	elects to pay the tax as provided by this section is liable is
50	50	computed by:
51	51	(1) determining the taxable entity's total revenue
52	52	from its entire business, as determined under Section 171.1011;
53	53	(2) apportioning the amount computed under
54	54	Subdivision (1) to this state, as provided by Section 171.106, to
55	55	determine the taxable entity's apportioned total revenue; and
56	56	(3) multiplying the amount computed under Subdivision
57	57	(2) by the rate of 0.11 [0.331] percent.
58	58	(b) This section applies only to a report originally due on
59	59	or after January 1, 2019.
60	60	SECTION 5. (a) Chapter 171, Tax Code, is repealed.
61	61	(b) A taxable entity that is subject to the franchise tax
62	62	imposed under Chapter 171, Tax Code, on December 31, 2019, shall
63	63	file a final franchise tax report and pay a transitional tax as
64	64	required by this subsection on or before May 15, 2020. The
65	65	transitional tax is equal to the tax the taxable entity would have
66	66	paid in 2020 under Chapter 171, Tax Code, if Chapter 171, Tax Code,
67	67	had not been repealed. The provisions of Chapter 171, Tax Code,
68	68	relating to the computation and payment of the franchise tax and the
69	69	filing of a franchise tax report that are in effect on December 31,
70	70	2019, remain in effect after the repeal of Chapter 171, Tax Code, by
71	71	this section for the purposes of computing and paying the
72	72	transitional tax and filing a franchise tax report as required by
73	73	this subsection.
74	74	(c) Chapter 171, Tax Code, and Subtitle B, Title 2, Tax
75	75	Code, continue to apply to audits, deficiencies, redeterminations,
76	76	and refunds of any tax due or collected under Chapter 171, including
77	77	the tax due as provided by Subsection (b) of this section, until
78	78	barred by limitations.
79	79	(d) The repeal of Chapter 171, Tax Code, does not affect:
80	80	(1) the status of a taxable entity that has had its
81	81	corporate privileges, certificate of authority, certificate of
82	82	organization, certificate of limited partnership, corporate
83	83	charter, or registration revoked, suit filed against it, or a
84	84	receiver appointed under Subchapter F, G, or H of that chapter;
85	85	(2) the ability of the comptroller of public accounts,
86	86	secretary of state, or attorney general to take action against a
87	87	taxable entity under Subchapter F, G, or H of that chapter for
88	88	actions that took place before the repeal; or
89	89	(3) the right of a taxable entity to contest a
90	90	forfeiture, revocation, lawsuit, or appointment of a receiver under
91	91	Subchapter F, G, or H of that chapter.
92	92	(e) This section takes effect January 1, 2020.
93	93	SECTION 6. Except as otherwise provided by this Act, this
94	94	Act applies only to a report originally due on or after the
95	95	effective date of this Act.
96	96	SECTION 7. Except as otherwise provided by this Act, this
97	97	Act takes effect January 1, 2018.