Texas 2017 - 85th Regular

Texas Senate Bill SB17 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Nelson S.B. No. 17
2		-	(In the Senate - Filed February 2, 2017; February 6, 2017,
3		-	read first time and referred to Committee on Finance;
4		-	March 6, 2017, reported adversely, with favorable Committee
5		-	Substitute by the following vote: Yeas 12, Nays 2; March 6, 2017,
6		-	sent to printer.)
7		-	Click here to see the committee vote
8		-	COMMITTEE SUBSTITUTE FOR S.B. No. 17 By: Hinojosa
	1	+	By: Nelson, et al. S.B. No. 17
9	2
10	3
11	4		A BILL TO BE ENTITLED
12	5		AN ACT
13	6		relating to the decrease of the rates of the franchise tax under
14	7		certain circumstances and the expiration of that tax.
15	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	9		SECTION 1. Sections 171.002(a) and (b), Tax Code, are
17	10		amended to read as follows:
18	11		(a) Subject to Sections 171.003, 171.004, and 171.1016 and
19	12		except as provided by Subsection (b), the rate of the franchise tax
20	13		is 0.75 percent of taxable margin.
21	14		(b) Subject to Sections 171.003, 171.004, and 171.1016, the
22	15		rate of the franchise tax is 0.375 percent of taxable margin for
23	16		those taxable entities primarily engaged in retail or wholesale
24	17		trade.
25	18		SECTION 2. Subchapter A, Chapter 171, Tax Code, is amended
26	19		by adding Section 171.004 to read as follows:
27	20		Sec. 171.004. ADJUSTMENT OF TAX RATES. (a) In this
28	21		section:
29	22		(1) "Biennial revenue estimate" means the estimate of
30	23		anticipated revenue to this state for the succeeding biennium that
31	24		the comptroller prepares in accordance with Section 49a(a), Article
32	25		III, Texas Constitution.
33	26		(2) "Current biennium" means the state fiscal biennium
34	27		in which a biennial revenue estimate is submitted to the governor
35	28		and legislature.
36	29		(3) "Succeeding biennium" means the state fiscal
37	30		biennium beginning after the current biennium.
38	31		(b) The comptroller shall determine and include with the
39	32		biennial revenue estimate:
40	33		(1) the amount of total general revenue-related funds
41	34		that would be available for certification for the succeeding
42	35		biennium assuming a franchise tax rate adjustment under this
43	36		section does not take effect in that biennium;
44	37		(2) the percentage change between the amount of total
45	38		general revenue-related funds available for certification for the
46	39		current biennium, as provided by the biennial revenue estimate, and
47	40		the amount provided by Subdivision (1) for the succeeding biennium;
48	41		(3) if the percentage change under Subdivision (2) is
49	42		greater than five percent, the amount of total general
50	43		revenue-related funds that would be available for certification for
51	44		the succeeding biennium assuming the franchise tax rate adjustment
52	45		under this section takes effect in the succeeding biennium; and
53	46		(4) if the percentage change under Subdivision (2) is
54	47		greater than five percent, the percentage change between the amount
55	48		of total general revenue-related funds available for certification
56	49		for the current biennium, as provided by the biennial revenue
57	50		estimate, and the amount provided by Subdivision (3) for the
58	51		succeeding biennium.
59	52		(c) If the percentage change determined under Subsection
60	53		(b)(2) is greater than five percent, the comptroller shall
61	54		determine the amount of revenue available for franchise tax
62	55		reduction, which is computed as follows:
63	56		FTR = 0.5 X (SBGR - (CBGR X 1.05))
64	57		where:
65	58		"FTR" is the amount of revenue available for franchise tax
66	59		reduction;
67	60		"SBGR" is the amount provided by Subsection (b)(1) for the
68	61		succeeding biennium; and
69	62		"CBGR" is the amount of total general revenue-related funds
70	63		available for certification for the current biennium, as provided
71	64		by the biennial revenue estimate.
72	65		(d) This subsection applies only if the percentage change
73	66		determined under Subsection (b)(2) is greater than five percent.
74	67		Not later than the last day of a state fiscal biennium, the
75	68		comptroller shall determine the rates for purposes of Sections
76	69		171.002(a) and (b) and Section 171.1016 that, if effective
77	70		beginning January 1 of the even-numbered year occurring during the
78	71		succeeding biennium, are estimated to reduce the amount of revenue
79	72		collected under this chapter for the succeeding biennium, as
80	73		compared to the amount of revenue that would be collected if the
81	74		rates then in effect remained in effect, by the amount of revenue
82	75		available for franchise tax reduction determined under Subsection
83	76		(c). In determining the rates under this subsection, the
84	77		comptroller shall proportionally reduce the rates under Sections
85	78		171.002(a) and (b) and Section 171.1016 that are in effect on the
86	79		date the comptroller makes the determination.
87	80		(e) Not later than the last day of a state fiscal biennium,
88	81		the comptroller shall:
89	82		(1) adopt the adjusted tax rates determined under
90	83		Subsection (d), if applicable;
91	84		(2) publish notice of the adjusted tax rates in the
92	85		Texas Register; and
93	86		(3) provide any other notice relating to the adjusted
94	87		tax rates that the comptroller considers appropriate.
95	88		(f) The tax rates adopted under Subsection (e):
96	89		(1) apply to a report originally due on or after
97	90		January 1 of the even-numbered year described by Subsection (d);
98	91		and
99	92		(2) are considered for purposes of this chapter to be
100	93		the rates provided by and imposed under Section 171.002 or
101	94		171.1016, as applicable.
102	95		(g) If the percentage change determined under Subsection
103	96		(b)(2) is not greater than five percent, the rates of the franchise
104	97		tax in effect when the biennial revenue estimate is submitted to the
105	98		governor and legislature remain in effect for the succeeding
106	99		biennium unless modified by other law.
107	100		(h) Notwithstanding Subsection (d), if an adjustment
108	101		otherwise required by that subsection would reduce a rate of the
109	102		franchise tax to less than zero, the rate is instead reduced to
110	103		zero.
111	104		(i) Notwithstanding any other law, if the rates of the
112	105		franchise tax are reduced to zero under Subsection (d) or (h), a
113	106		taxable entity does not owe any tax and is not required to file a
114	107		report that would otherwise be originally due on or after the date
115	108		those rates are reduced to zero.
116	109		(j) The comptroller may adopt rules related to making the
117	110		determinations required by this section.
118	111		(k) In the state fiscal year in which the rates of the
119	112		franchise tax are reduced to zero under Subsection (d) or (h):
120	113		(1) this chapter expires as provided by Section
121	114		171.9321; and
122	115		(2) not later than January 15 of that year the
123	116		comptroller shall:
124	117		(A) publish notice in the Texas Register that an
125	118		entity previously subject to the tax imposed under this chapter is
126	119		no longer required to file a report or pay the tax; and
127	120		(B) provide any other notice relating to the
128	121		expiration of the tax that the comptroller considers appropriate.
129	122		(l) An action taken by the comptroller under this section is
130	123		final and may not be appealed.
131	124		SECTION 3. Sections 171.1016(b) and (e), Tax Code, are
132	125		amended to read as follows:
133	126		(b) The amount of the tax for which a taxable entity that
134	127		elects to pay the tax as provided by this section is liable is
135	128		computed by:
136	129		(1) determining the taxable entity's total revenue
137	130		from its entire business, as determined under Section 171.1011;
138	131		(2) apportioning the amount computed under
139	132		Subdivision (1) to this state, as provided by Section 171.106, to
140	133		determine the taxable entity's apportioned total revenue; and
141	134		(3) multiplying the amount computed under Subdivision
142	135		(2) by the rate of 0.331 percent or, if applicable, an adjusted tax
143	136		rate determined under Section 171.004.
144	137		(e) A reference in this chapter or other law to the rate of
145	138		the franchise tax means, as appropriate:
146	139		(1)[,] the rate under Section 171.002 or, for a
147	140		taxable entity that elects to pay the tax as provided by this
148	141		section, the rate under this section; or
149	142		(2) the adjusted rates under Section 171.004.
150	143		SECTION 4. Chapter 171, Tax Code, is amended by adding
151	144		Subchapter Z to read as follows:
152	145		SUBCHAPTER Z. EXPIRATION
153	146		Sec. 171.9321. EXPIRATION. This chapter expires on
154	147		December 31 of the year in which the rates of the franchise tax
155	148		under Sections 171.002 and 171.1016 are reduced to zero under
156	149		Section 171.004(d) or (h).
157	150		SECTION 5. (a) After Chapter 171, Tax Code, expires as
158	151		provided by Subchapter Z, Chapter 171, Tax Code, as added by this
159	152		Act:
160	153		(1) Chapter 171 and Subtitle B, Title 2, Tax Code,
161	154		continue to apply to audits, deficiencies, redeterminations, and
162	155		refunds of any tax due or collected under Chapter 171 until barred
163	156		by limitations; and
164	157		(2) Sections 171.206 through 171.210, Tax Code,
165	158		continue to apply to information described by those sections.
166	159		(b) The expiration of Chapter 171, Tax Code, does not
167	160		affect:
168	161		(1) the status of a taxable entity that has had its
169	162		corporate privileges, certificate of authority, certificate of
170	163		organization, certificate of limited partnership, corporate
171	164		charter, or registration revoked, a suit filed against it, or a
172	165		receiver appointed under Subchapter F, G, or H of that chapter;
173	166		(2) the ability of the comptroller of public accounts,
174	167		secretary of state, or attorney general to take action against a
175	168		taxable entity under Subchapter F, G, or H of that chapter for
176	169		actions that took place before the chapter expired; or
177	170		(3) the right of a taxable entity to contest a
178	171		forfeiture, revocation, lawsuit, or appointment of a receiver under
179	172		Subchapter F, G, or H of that chapter.
180	173		SECTION 6. This Act applies only to a report originally due
181	174		on or after January 1, 2020.
182	175		SECTION 7. This Act takes effect September 1, 2017.
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