87R10860 BEF-D
By: Martinez Fischer H.B. No. 4467
A BILL TO BE ENTITLED
AN ACT
relating to imposing a tax on certain revenue derived from digital
advertising services.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle G, Title 2, Tax Code, is amended by
adding Chapter 184 to read as follows:
CHAPTER 184. DIGITAL ADVERTISING TAX
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 184.0001. DEFINITIONS. In this chapter:
(1) "Assessable base" means the portion of gross
revenue derived from digital advertising services in this state.
(2) "Digital advertising services" means
advertisement services on a digital interface. The term includes
advertisements in the form of banner advertising, search engine
advertising, interstitial advertising, and other comparable
advertising services.
(3) "Digital interface" means any type of software,
including any part of an Internet website or application that a user
is able to access.
(4) "Gross revenue" means income or revenue from all
sources located anywhere in the world, before any expenses or
taxes, computed according to generally accepted accounting
principles.
(5) "Person" does not include an individual.
(6) "Reporting period" means the calendar year on
which a report is based.
(7) "User" means a person or individual who accesses a
digital interface with a device.
Sec. 184.0002. RULES. (a) The comptroller shall adopt
rules necessary to implement, administer, and enforce this chapter.
(b) The rules must include a method for determining the
portion of a person's gross revenue that is derived from digital
advertising services in this state. The method may include formulas
for apportioning any part of a person's gross revenue to this state
based on any person or individual's nexus with this state for the
purpose of taxation.
(c) The rules may include a requirement that a person make
periodic reports during a reporting period and pay estimated tax
amounts for each report.
SUBCHAPTER B. TAX
Sec. 184.0051. TAX IMPOSED. A tax is imposed on a person
whose:
(1) assessable base for the reporting period is at
least $1 million; and
(2) gross revenue for the reporting period is at least
$100 million.
Sec. 184.0052. TAX RATES. The rate of the tax imposed under
this chapter is:
(1) 2.5 percent of a person's assessable base for the
reporting period if the person's gross revenue for the reporting
period is at least $100 million but not more than $1 billion;
(2) five percent of a person's assessable base for the
reporting period if the person's gross revenue for the reporting
period is more than $1 billion but not more than $5 billion;
(3) 7.5 percent of a person's assessable base for the
reporting period if the person's gross revenue for the reporting
period is more than $5 billion but not more than $15 billion; and
(4) 10 percent of a person's assessable base for the
reporting period if the person's gross revenue for the reporting
period is more than $15 billion.
Sec. 184.0053. BUSINESS ON WHICH TAX IS BASED. (a) The tax
is based on gross revenue from business done during the reporting
period.
(b) The comptroller shall adopt rules for determining when
business is done. To the extent practicable, the comptroller shall
consider business to be done when revenue derived from that
business is recognized by a person according to generally accepted
accounting principles.
SUBCHAPTER C. RECORDS, REPORTS, AND PAYMENTS
Sec. 184.0101. RECORDS. (a) A person on whom the tax is or
may be imposed shall keep records as required by comptroller rule.
(b) The comptroller may investigate or examine any records
of a person to determine the person's liability for the tax.
Sec. 184.0102. REPORT AND PAYMENT. (a) A person on whom the
tax is imposed shall file a report with the comptroller on or before
April 15 following the end of a reporting period. The report must be
on a form and contain the information required by the comptroller.
(b) Payment of the tax for a reporting period is due when the
report is due. The person shall pay the tax to the comptroller.
SUBCHAPTER D. DISPOSITION OF TAX PROCEEDS
Sec. 184.0151. ALLOCATION AND DEPOSIT OF PROCEEDS. The
comptroller shall deposit:
(1) one-fourth of the proceeds from the collection of
the tax to the credit of the foundation school fund; and
(2) three-fourths of the proceeds from the collection
of the tax to the credit of the general revenue fund.
SECTION 2. (a) Chapter 184, Tax Code, as added by this Act,
applies only to revenue derived from business done on or after
January 1, 2022.
(b) A person is required to file the first report and make
the first payment under Section 184.0102, Tax Code, as added by this
Act, on or before April 15, 2023.
SECTION 3. (a) Except as provided by Subsection (b) of this
section, this Act takes effect January 1, 2022.
(b) Section 184.0002, Tax Code, as added by this Act, takes
effect September 1, 2021.