Texas 2017 - 85th Regular

Texas House Bill HB599 Compare Versions

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

Old	New	Differences
1	1	85R919 BEF-D
2	2	By: Schofield H.B. No. 599
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the decrease of the rates of the franchise tax under
8	8	certain circumstances and the expiration of that tax.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 171.002(a) and (b), Tax Code, are
11	11	amended to read as follows:
12	12	(a) Subject to Sections 171.003, 171.004, and 171.1016 and
13	13	except as provided by Subsection (b), the rate of the franchise tax
14	14	is 0.75 percent of taxable margin.
15	15	(b) Subject to Sections 171.003, 171.004, and 171.1016, the
16	16	rate of the franchise tax is 0.375 percent of taxable margin for
17	17	those taxable entities primarily engaged in retail or wholesale
18	18	trade.
19	19	SECTION 2. Subchapter A, Chapter 171, Tax Code, is amended
20	20	by adding Section 171.004 to read as follows:
21	21	Sec. 171.004. ADJUSTMENT OF TAX RATES. (a) Beginning in
22	22	2018, on January 1 of each even-numbered year occurring during a
23	23	state fiscal biennium for which the comptroller's certification
24	24	revenue estimate projects that the percent change from the previous
25	25	state fiscal biennium in total general revenue-related funds
26	26	available for certification will be at least six percent:
27	27	(1) the rate of the franchise tax under Section
28	28	171.002(a) is adjusted by subtracting 0.25 from the rate in effect
29	29	on December 31 of the previous year;
30	30	(2) the rate of the franchise tax under Section
31	31	171.002(b) is adjusted by subtracting 0.125 from the rate in effect
32	32	on December 31 of the previous year; and
33	33	(3) the rate of the franchise tax under Section
34	34	171.1016(b)(3) is adjusted by subtracting 0.111 from the rate in
35	35	effect on December 31 of the previous year.
36	36	(b) The tax rates determined under Subsection (a):
37	37	(1) apply to a report originally due on or after
38	38	January 1 of the even-numbered year described by Subsection (a);
39	39	and
40	40	(2) are considered for purposes of this chapter to be
41	41	the rates provided by and imposed under Section 171.002 or
42	42	171.1016, as applicable.
43	43	(c) If in an even-numbered year the comptroller determines
44	44	that the condition under Subsection (a) has not been met for the
45	45	state fiscal biennium during which that year occurs, the rates of
46	46	the franchise tax in effect on December 31 of the previous year
47	47	remain in effect until at least January 1 of the next even-numbered
48	48	year.
49	49	(d) Notwithstanding Subsection (a), if an adjustment
50	50	otherwise required by Subsection (a) would reduce a rate of the
51	51	franchise tax to less than zero, the rate is instead reduced to
52	52	zero.
53	53	(e) Notwithstanding any other law, if the rates of the
54	54	franchise tax are reduced to zero under Subsection (a) or (d), a
55	55	taxable entity does not owe any tax and is not required to file a
56	56	report that would otherwise be originally due on or after the date
57	57	those rates are reduced to zero.
58	58	(f) The comptroller shall determine whether the condition
59	59	under Subsection (a) is met and determine the applicable franchise
60	60	tax rates under this section. The comptroller may adopt rules
61	61	related to making those determinations. The comptroller shall
62	62	publish the franchise tax rates in effect for a year in the Texas
63	63	Register and on the comptroller's Internet website not later than
64	64	January 15 of that year.
65	65	(g) In the state fiscal year in which the rates of the
66	66	franchise tax are reduced to zero under Subsection (a) or (d):
67	67	(1) this chapter expires as provided by Section
68	68	171.9321; and
69	69	(2) not later than January 15 of that year the
70	70	comptroller shall:
71	71	(A) publish notice in the Texas Register that an
72	72	entity previously subject to the tax imposed under this chapter is
73	73	no longer required to file a report or pay the tax; and
74	74	(B) provide any other notice relating to the
75	75	expiration of the tax that the comptroller considers appropriate.
76	76	(h) An action taken by the comptroller under this section is
77	77	final and may not be appealed.
78	78	SECTION 3. Sections 171.1016(b) and (e), Tax Code, are
79	79	amended to read as follows:
80	80	(b) The amount of the tax for which a taxable entity that
81	81	elects to pay the tax as provided by this section is liable is
82	82	computed by:
83	83	(1) determining the taxable entity's total revenue
84	84	from its entire business, as determined under Section 171.1011;
85	85	(2) apportioning the amount computed under
86	86	Subdivision (1) to this state, as provided by Section 171.106, to
87	87	determine the taxable entity's apportioned total revenue; and
88	88	(3) multiplying the amount computed under Subdivision
89	89	(2) by the rate of 0.331 percent or, if applicable, an adjusted tax
90	90	rate determined under Section 171.004.
91	91	(e) A reference in this chapter or other law to the rate of
92	92	the franchise tax means, as appropriate:
93	93	(1) [,] the rate under Section 171.002 or, for a
94	94	taxable entity that elects to pay the tax as provided by this
95	95	section, the rate under this section; or
96	96	(2) the adjusted rates under Section 171.004.
97	97	SECTION 4. Chapter 171, Tax Code, is amended by adding
98	98	Subchapter Z to read as follows:
99	99	SUBCHAPTER Z. EXPIRATION
100	100	Sec. 171.9321. EXPIRATION. This chapter expires on
101	101	December 31 of the year in which the rates of the franchise tax
102	102	under Sections 171.002 and 171.1016 are reduced to zero under
103	103	Section 171.004(a) or (d).
104	104	SECTION 5. (a) After Chapter 171, Tax Code, expires as
105	105	provided by Subchapter Z, Chapter 171, Tax Code, as added by this
106	106	Act, Chapter 171 and Subtitle B, Title 2, Tax Code, continue to
107	107	apply to audits, deficiencies, redeterminations, and refunds of any
108	108	tax due or collected under Chapter 171 until barred by limitations.
109	109	(b) The expiration of Chapter 171, Tax Code, does not
110	110	affect:
111	111	(1) the status of a taxable entity that has had its
112	112	corporate privileges, certificate of authority, certificate of
113	113	organization, certificate of limited partnership, corporate
114	114	charter, or registration revoked, a suit filed against it, or a
115	115	receiver appointed under Subchapter F, G, or H of that chapter;
116	116	(2) the ability of the comptroller of public accounts,
117	117	secretary of state, or attorney general to take action against a
118	118	taxable entity under Subchapter F, G, or H of that chapter for
119	119	actions that took place before the chapter expired; or
120	120	(3) the right of a taxable entity to contest a
121	121	forfeiture, revocation, lawsuit, or appointment of a receiver under
122	122	Subchapter F, G, or H of that chapter.
123	123	SECTION 6. This Act applies only to a report originally due
124	124	on or after January 1, 2018.
125	125	SECTION 7. This Act takes effect September 1, 2017.