By: Herrero H.B. No. 2037
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for research and development of
energy storage technologies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter V to read as follows:
SUBCHAPTER V. TAX CREDIT FOR RESEARCH AND DEVELOPMENT OF ENERGY
STORAGE TECHNOLOGY
Sec. 171.901. DEFINITIONS. In this subchapter:
(1) "Base amount" and "qualified research expenses"
have the meanings assigned by Section 41, Internal Revenue Code,
except that all payments and expenses must be for research
conducted in this state that relates to the development of energy
storage technologies.
(2) "Energy storage technology" means a technology for
storing generated electricity for later transmission and
distribution.
Sec. 171.902. ENTITLEMENT TO CREDIT. A taxable entity is
entitled to a credit in the amount and under the conditions and
limitations provided by this subchapter against the tax imposed
under this chapter.
Sec. 171.903. AMOUNT; LIMITATIONS. (a) The credit for a
report is equal to the sum of the excess of qualified research
expenses incurred in this state during the accounting period on
which the tax is based over the base amount for that research.
(b) For the purposes of this section, "gross receipts" as
used in Section 41, Internal Revenue Code, means gross receipts as
determined under Section 171.103.
(c) The total credit claimed under this subchapter for a
report may not exceed the amount of franchise tax due after any
other applicable credits.
Sec. 171.904. CARRYFORWARD. (a) If a taxable entity is
eligible for a credit that exceeds the limitation under Section
171.903(c), the taxable entity may carry the unused credit forward
for not more than 20 consecutive reports.
(b) A carryforward is considered the remaining portion of a
credit that cannot be claimed in the current year because of the
limitation under Section 171.903(c). A carryforward is added to the
next year's credit in determining whether the limitation is met for
that year. A credit carryforward from a previous report is
considered to be used before the current year credit.
Sec. 171.905. ASSIGNMENT PROHIBITED. A taxable entity may
not convey, assign, or transfer the credit allowed under this
subchapter to another entity unless all of the assets of the taxable
entity are conveyed, assigned, or transferred.
Sec. 171.906. RULES. The comptroller shall adopt rules
necessary to implement this subchapter.
SECTION 2. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2022.