Texas 2017 - 85th Regular

Texas House Bill HB28 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		85R23415 E
2	2		By: Bonnen of Brazoria, et al. H.B. No. 28
	3	+	Substitute the following for H.B. No. 28:
	4	+	By: Shine C.S.H.B. No. 28
3	5
4	6
5	7		A BILL TO BE ENTITLED
6	8		AN ACT
7	9		relating to the use of certain surplus state revenue, in certain
8	10		circumstances, to adjust franchise tax rates to phase out the
9	11		franchise tax and to the expiration of that tax.
10	12		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	13		SECTION 1. Sections 171.002(a) and (b), Tax Code, are
12	14		amended to read as follows:
13	15		(a) Subject to Sections 171.003, 171.004, and 171.1016 and
14	16		except as provided by Subsection (b), the rate of the franchise tax
15	17		is 0.75 percent of taxable margin.
16	18		(b) Subject to Sections 171.003, 171.004, and 171.1016, the
17	19		rate of the franchise tax is 0.375 percent of taxable margin for
18	20		those taxable entities primarily engaged in retail or wholesale
19	21		trade.
20	22		SECTION 2. Subchapter A, Chapter 171, Tax Code, is amended
21	23		by adding Section 171.004 to read as follows:
22	24		Sec. 171.004. ADJUSTMENT OF TAX RATES. (a) As soon as
23	25		practical after September 1, but before December 15, of each
24	26		odd-numbered year, the comptroller shall determine:
25	27		(1) the ending balance of general revenue related
26	28		funds available for certification for the preceding state fiscal
27	29		biennium; and
28	30		(2) the tax rates for purposes of Sections 171.002(a)
29	31		and (b) and Section 171.1016 that, if applied beginning January 1 of
30	32		the next year, are estimated to yield an amount of revenue for the
31	33		state fiscal biennium in which the determination is made equal to
32	34		the lesser of:
33	35		(A) the ending balance determined under
34	36		Subdivision (1); or
35	37		(B) $3.5 billion.
36	38		(b) Not later than December 15 of each odd-numbered year,
37	39		the comptroller shall:
38	40		(1) determine the adjusted tax rates, which are the
39	41		tax rates under Sections 171.002(a) and (b) and Section 171.1016 in
40	42		effect on the date the comptroller makes the determination under
41	43		Subsection (a)(2) less the tax rates determined under Subsection
42	44		(a)(2); and
43	45		(2) except as provided by Subsection (e):
44	46		(A) adopt the adjusted tax rates determined under
45	47		Subdivision (1);
46	48		(B) publish notice of the adjusted tax rates in
47	49		the Texas Register; and
48	50		(C) provide any other notice relating to the
49	51		adjusted tax rates that the comptroller considers appropriate.
50	52		(c) In determining the tax rates under Subsection (a)(2) and
51	53		the adjusted tax rates under Subsection (b)(1), the comptroller
52	54		shall ensure that the adjusted tax rates reflect proportional
53	55		reductions to the tax rates in effect under Sections 171.002(a) and
54	56		(b) and Section 171.1016 at the time the determinations are made.
55	57		(d) The adjusted tax rates adopted under Subsection (b):
56	58		(1) apply to a report originally due on or after
57	59		January 1 of the even-numbered year following the date the rates are
58	60		adopted; and
59	61		(2) are considered for purposes of this chapter to be
60	62		the rates provided by and imposed under Section 171.002 or
61	63		171.1016, as applicable.
62	64		(e) In the state fiscal year in which the adjusted tax rates
63	65		determined under Subsection (b)(1) are less than 15 percent of the
64	66		tax rates under Sections 171.002(a) and (b) and Section 171.1016 in
65	67		effect on September 1, 2017:
66	68		(1) this chapter expires on December 31 of that year;
67	69		and
68	70		(2) not later than December 15 of that year the
69	71		comptroller shall:
70	72		(A) publish notice in the Texas Register that an
71	73		entity previously subject to the tax imposed under this chapter is
72	74		not required to file or pay the tax in connection with a report that
73	75		would otherwise be originally due on or after January 1 of the next
74	76		year; and
75	77		(B) provide any other notice relating to the
76	78		expiration of the tax that the comptroller considers appropriate.
77	79		(f) An action taken by the comptroller under this section is
78	80		final and may not be appealed.
79	81		(g) The comptroller shall adopt rules to implement this
80	82		section.
81	83		SECTION 3. Sections 171.1016(b) and (e), Tax Code, are
82	84		amended to read as follows:
83	85		(b) The amount of the tax for which a taxable entity that
84	86		elects to pay the tax as provided by this section is liable is
85	87		computed by:
86	88		(1) determining the taxable entity's total revenue
87	89		from its entire business, as determined under Section 171.1011;
88	90		(2) apportioning the amount computed under
89	91		Subdivision (1) to this state, as provided by Section 171.106, to
90	92		determine the taxable entity's apportioned total revenue; and
91	93		(3) multiplying the amount computed under Subdivision
92	94		(2) by the rate of 0.331 percent or, if applicable, an adjusted tax
93	95		rate determined under Section 171.004.
94	96		(e) A reference in this chapter or other law to the rate of
95	97		the franchise tax means, as appropriate:
96	98		(1) [,] the rate under Section 171.002 or, for a
97	99		taxable entity that elects to pay the tax as provided by this
98	100		section, the rate under this section; or
99	101		(2) the adjusted rates under Section 171.004.
100	102		SECTION 4. Chapter 171, Tax Code, is amended by adding
101	103		Subchapter Z to read as follows:
102	104		SUBCHAPTER Z. EXPIRATION
103	105		Sec. 171.9321. EXPIRATION. This chapter expires on the
104	106		date provided by Section 171.004(e)(1).
105	107		SECTION 5. (a) After Chapter 171, Tax Code, expires as
106	108		provided by Subchapter Z, Chapter 171, Tax Code, as added by this
107	109		Act:
108	110		(1) the provisions of former Chapter 171 and the
109	111		provisions of Subtitle B, Title 2, Tax Code, continue to apply to
110	112		audits, deficiencies, redeterminations, and refunds of any tax due
111	113		or collected under former Chapter 171 until barred by limitations;
112	114		and
113	115		(2) former Sections 171.206 through 171.210, Tax Code,
114	116		continue to apply to information described by those sections.
115	117		(b) The expiration of Chapter 171, Tax Code, does not
116	118		affect:
117	119		(1) the status of a taxable entity that has had its
118	120		corporate privileges, certificate of authority, certificate of
119	121		organization, certificate of limited partnership, corporate
120	122		charter, or registration revoked, a suit filed against it, or a
121	123		receiver appointed under former Subchapter F, G, or H of that
122	124		chapter;
123	125		(2) the ability of the comptroller of public accounts,
124	126		secretary of state, or attorney general to take action against a
125	127		taxable entity under former Subchapter F, G, or H of that chapter
126	128		for actions that took place before the chapter expired; or
127	129		(3) the right of a taxable entity to contest a
128	130		forfeiture, revocation, lawsuit, or appointment of a receiver under
129	131		former Subchapter F, G, or H of that chapter.
130	132		SECTION 6. This Act applies only to a report originally due
131	133		on or after January 1, 2020.
132	134		SECTION 7. This Act takes effect September 1, 2019.