| 1 | 1 | | By: Herrero H.B. No. 2037 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to a franchise tax credit for research and development of |
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| 7 | 7 | | energy storage technologies. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Chapter 171, Tax Code, is amended by adding |
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| 10 | 10 | | Subchapter V to read as follows: |
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| 11 | 11 | | SUBCHAPTER V. TAX CREDIT FOR RESEARCH AND DEVELOPMENT OF ENERGY |
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| 12 | 12 | | STORAGE TECHNOLOGY |
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| 13 | 13 | | Sec. 171.901. DEFINITIONS. In this subchapter: |
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| 14 | 14 | | (1) "Base amount" and "qualified research expenses" |
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| 15 | 15 | | have the meanings assigned by Section 41, Internal Revenue Code, |
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| 16 | 16 | | except that all payments and expenses must be for research |
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| 17 | 17 | | conducted in this state that relates to the development of energy |
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| 18 | 18 | | storage technologies. |
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| 19 | 19 | | (2) "Energy storage technology" means a technology for |
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| 20 | 20 | | storing generated electricity for later transmission and |
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| 21 | 21 | | distribution. |
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| 22 | 22 | | Sec. 171.902. ENTITLEMENT TO CREDIT. A taxable entity is |
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| 23 | 23 | | entitled to a credit in the amount and under the conditions and |
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| 24 | 24 | | limitations provided by this subchapter against the tax imposed |
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| 25 | 25 | | under this chapter. |
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| 26 | 26 | | Sec. 171.903. AMOUNT; LIMITATIONS. (a) The credit for a |
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| 27 | 27 | | report is equal to the sum of the excess of qualified research |
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| 28 | 28 | | expenses incurred in this state during the accounting period on |
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| 29 | 29 | | which the tax is based over the base amount for that research. |
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| 30 | 30 | | (b) For the purposes of this section, "gross receipts" as |
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| 31 | 31 | | used in Section 41, Internal Revenue Code, means gross receipts as |
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| 32 | 32 | | determined under Section 171.103. |
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| 33 | 33 | | (c) The total credit claimed under this subchapter for a |
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| 34 | 34 | | report may not exceed the amount of franchise tax due after any |
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| 35 | 35 | | other applicable credits. |
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| 36 | 36 | | Sec. 171.904. CARRYFORWARD. (a) If a taxable entity is |
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| 37 | 37 | | eligible for a credit that exceeds the limitation under Section |
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| 38 | 38 | | 171.903(c), the taxable entity may carry the unused credit forward |
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| 39 | 39 | | for not more than 20 consecutive reports. |
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| 40 | 40 | | (b) A carryforward is considered the remaining portion of a |
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| 41 | 41 | | credit that cannot be claimed in the current year because of the |
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| 42 | 42 | | limitation under Section 171.903(c). A carryforward is added to the |
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| 43 | 43 | | next year's credit in determining whether the limitation is met for |
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| 44 | 44 | | that year. A credit carryforward from a previous report is |
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| 45 | 45 | | considered to be used before the current year credit. |
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| 46 | 46 | | Sec. 171.905. ASSIGNMENT PROHIBITED. A taxable entity may |
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| 47 | 47 | | not convey, assign, or transfer the credit allowed under this |
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| 48 | 48 | | subchapter to another entity unless all of the assets of the taxable |
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| 49 | 49 | | entity are conveyed, assigned, or transferred. |
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| 50 | 50 | | Sec. 171.906. RULES. The comptroller shall adopt rules |
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| 51 | 51 | | necessary to implement this subchapter. |
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| 52 | 52 | | SECTION 2. This Act applies only to a report originally due |
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| 53 | 53 | | on or after the effective date of this Act. |
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| 54 | 54 | | SECTION 3. This Act takes effect January 1, 2022. |
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