Texas 2019 - 86th Regular

Texas Senate Bill SB410 Compare Versions

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

Old	New	Differences
1	1	86R482 CJC-D
2	2	By: Hughes S.B. No. 410
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a franchise tax credit for ad valorem taxes paid by a
8	8	taxable entity on certain inventory.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 171, Tax Code, is amended by adding
11	11	Subchapter N to read as follows:
12	12	SUBCHAPTER N. TAX CREDIT FOR BUSINESS AD VALOREM TAX PAYMENTS ON
13	13	INVENTORY
14	14	Sec. 171.701. DEFINITIONS. In this subchapter:
15	15	(1) "Qualified entity" means a taxable entity that
16	16	pays ad valorem taxes on qualified inventory owned by the entity and
17	17	located in this state.
18	18	(2) "Qualified inventory" means tangible personal
19	19	property held for sale at retail other than:
20	20	(A) a dealer's motor vehicle inventory as defined
21	21	by Section 23.121;
22	22	(B) a dealer's heavy equipment inventory as
23	23	defined by Section 23.1241;
24	24	(C) a dealer's vessel and outboard motor
25	25	inventory as defined by Section 23.124; and
26	26	(D) retail manufactured housing inventory as
27	27	defined by Section 23.127.
28	28	Sec. 171.702. ELIGIBILITY FOR CREDIT. A qualified entity
29	29	is eligible to apply for a credit in the amount and under the
30	30	conditions and limitations provided by this subchapter against the
31	31	tax imposed under this chapter.
32	32	Sec. 171.703. AMOUNT OF CREDIT; LIMITATIONS. (a) The total
33	33	amount of the credit under this subchapter is equal to the amount of
34	34	the ad valorem taxes paid by the qualified entity during the period
35	35	on which a report is based that are derived from the taxable value
36	36	of qualified inventory owned by the entity and located in this
37	37	state.
38	38	(b) The total credit claimed for a report, including the
39	39	amount of any carryforward under Section 171.704, may not exceed
40	40	the amount of franchise tax due for the report after any other
41	41	applicable tax credits.
42	42	Sec. 171.704. CARRYFORWARD. (a) If a qualified entity is
43	43	eligible for a credit that exceeds the limitation under Section
44	44	171.703(b), the entity may carry the unused credit forward for not
45	45	more than three consecutive reports.
46	46	(b) A carryforward is considered the remaining portion of a
47	47	credit that cannot be claimed in the current year because of the
48	48	limitation under Section 171.703(b). A carryforward is added to
49	49	the next year's installment of the credit in determining the
50	50	limitation for that year. A credit carryforward from a previous
51	51	report is considered to be used before the current year
52	52	installment.
53	53	Sec. 171.705. APPLICATION FOR CREDIT. (a) A qualified
54	54	entity must apply for a credit under this subchapter on or with the
55	55	report for the period for which the credit is claimed.
56	56	(b) A qualified entity shall file with a report on which the
57	57	credit is claimed any information required by the comptroller to
58	58	sufficiently demonstrate that the entity is eligible for the
59	59	credit.
60	60	(c) The burden of establishing eligibility for and the value
61	61	of the credit is on the qualified entity.
62	62	Sec. 171.706. SALE OR ASSIGNMENT OF CREDIT. (a) A
63	63	qualified entity that earns a credit under this subchapter may sell
64	64	or assign all or part of the credit, and any entity to which all or
65	65	part of the credit is sold or assigned may sell or assign all or part
66	66	of the credit to another entity. There is no limit on the total
67	67	number of transactions for the sale or assignment of all or part of
68	68	the total credit authorized under this subchapter, however,
69	69	collectively all transferred and retained credits claimed for a
70	70	period are subject to the maximum total limitations provided by
71	71	Section 171.703.
72	72	(b) An entity that sells or assigns a credit under this
73	73	section and the entity to which the credit is sold or assigned shall
74	74	jointly submit written notice of the sale or assignment to the
75	75	comptroller on a form promulgated by the comptroller not later than
76	76	the 30th day after the date of the sale or assignment. The notice
77	77	must include:
78	78	(1) the date of the sale or assignment;
79	79	(2) the amount of the credit sold or assigned;
80	80	(3) the names and federal tax identification numbers
81	81	of the entity that sold or assigned the credit or part of the credit
82	82	and the entity to which the credit or part of the credit was sold or
83	83	assigned; and
84	84	(4) the amount of the credit owned by the selling or
85	85	assigning entity before the sale or assignment, and the amount the
86	86	selling or assigning entity retained, if any, after the sale or
87	87	assignment.
88	88	(c) The sale or assignment of a credit in accordance with
89	89	this section does not extend the period for which a credit may be
90	90	carried forward and does not increase the total amount of the credit
91	91	that may be claimed.
92	92	Sec. 171.707. RULES. The comptroller shall adopt rules
93	93	necessary to implement this subchapter.
94	94	SECTION 2. This Act applies only to a report originally due
95	95	on or after the effective date of this Act.
96	96	SECTION 3. This Act takes effect January 1, 2020.