| 1 | 1 | | 85R2510 GRM-D |
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| 2 | 2 | | By: Romero, Jr. H.B. No. 42 |
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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 certain taxable entities |
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| 8 | 8 | | offering postsecondary tuition assistance. |
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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 L-1 to read as follows: |
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| 12 | 12 | | SUBCHAPTER L-1. TAX CREDIT FOR CERTAIN ENTITIES THAT PROVIDE |
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| 13 | 13 | | TUITION ASSISTANCE |
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| 14 | 14 | | Sec. 171.621. DEFINITIONS. In this subchapter: |
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| 15 | 15 | | (1) "Neighborhood empowerment zone" has the meaning |
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| 16 | 16 | | assigned to "zone" by Section 378.001, Local Government Code. |
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| 17 | 17 | | (2) "Postsecondary educational institution" means any |
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| 18 | 18 | | public or private institution that provides courses of instruction |
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| 19 | 19 | | beyond that offered in secondary schools, including proprietary, |
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| 20 | 20 | | vocational, and technical schools. |
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| 21 | 21 | | Sec. 171.622. ELIGIBILITY FOR CREDIT. A taxable entity is |
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| 22 | 22 | | entitled to a credit in the amount and under the conditions and |
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| 23 | 23 | | limitations provided by this subchapter against the tax imposed |
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| 24 | 24 | | under this chapter. |
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| 25 | 25 | | Sec. 171.623. QUALIFICATION. A taxable entity qualifies |
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| 26 | 26 | | for a credit under this subchapter if: |
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| 27 | 27 | | (1) the taxable entity provides tuition assistance for |
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| 28 | 28 | | an employee attending a postsecondary educational institution; |
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| 29 | 29 | | (2) the taxable entity is located in a neighborhood |
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| 30 | 30 | | empowerment zone; and |
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| 31 | 31 | | (3) the amount of the taxable entity's total revenue |
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| 32 | 32 | | from its entire business for the reporting period for which the |
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| 33 | 33 | | credit is claimed is less than $250 million. |
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| 34 | 34 | | Sec. 171.624. AMOUNT; LIMITATION. (a) Except as otherwise |
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| 35 | 35 | | provided by this section, the amount of the credit for the period |
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| 36 | 36 | | covered by a tax report is equal to the lesser of the amount of |
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| 37 | 37 | | tuition assistance provided to all employees during the period and: |
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| 38 | 38 | | (1) $10,000, if the amount of the taxable entity's |
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| 39 | 39 | | total revenue from its entire business for the period is less than |
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| 40 | 40 | | $10 million; |
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| 41 | 41 | | (2) the greater of $10,000 and 50 percent of the amount |
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| 42 | 42 | | of franchise tax due for the report after all other applicable tax |
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| 43 | 43 | | credits, if the taxable entity's total revenue from its entire |
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| 44 | 44 | | business for the period is at least $10 million but less than $50 |
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| 45 | 45 | | million; and |
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| 46 | 46 | | (3) the lesser of $50,000 and 50 percent of the amount |
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| 47 | 47 | | of franchise tax due for the report after all other applicable tax |
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| 48 | 48 | | credits, if the taxable entity's total revenue from its entire |
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| 49 | 49 | | business for the period is at least $50 million but less than $250 |
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| 50 | 50 | | million. |
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| 51 | 51 | | (b) The total credit claimed on a tax report may not exceed |
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| 52 | 52 | | the amount of franchise tax due for the report after all other |
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| 53 | 53 | | applicable tax credits. |
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| 54 | 54 | | (c) A taxable entity may claim a credit under this |
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| 55 | 55 | | subchapter for an expenditure made during a reporting period only |
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| 56 | 56 | | against the tax owed for the period. |
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| 57 | 57 | | Sec. 171.625. APPLICATION FOR CREDIT. (a) A taxable entity |
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| 58 | 58 | | must apply for a credit under this subchapter on or with the tax |
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| 59 | 59 | | report for the period for which the credit is claimed. |
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| 60 | 60 | | (b) The comptroller shall adopt a form for the application |
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| 61 | 61 | | for the credit. A taxable entity must use the form in applying for |
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| 62 | 62 | | the credit. |
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| 63 | 63 | | Sec. 171.626. ASSIGNMENT PROHIBITED. A taxable entity may |
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| 64 | 64 | | not convey, assign, or transfer the credit allowed under this |
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| 65 | 65 | | subchapter to another taxable entity unless all of the assets of the |
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| 66 | 66 | | taxable entity are conveyed, assigned, or transferred in the same |
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| 67 | 67 | | transaction. |
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| 68 | 68 | | Sec. 171.627. RULES. The comptroller shall adopt rules |
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| 69 | 69 | | necessary to implement this subchapter. |
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| 70 | 70 | | Sec. 171.628. EXPIRATION. This subchapter expires December |
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| 71 | 71 | | 31, 2022. |
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| 72 | 72 | | SECTION 2. This Act applies only to a report originally due |
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| 73 | 73 | | on or after the effective date of this Act. |
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| 74 | 74 | | SECTION 3. This Act takes effect January 1, 2018. |
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