Texas 2023 - 88th Regular

Texas House Bill HB1118 Compare Versions

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1	1	88R1606 CJD-D
2	2	By: Thierry H.B. No. 1118
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a franchise tax credit for entities that establish a
8	8	grocery store or healthy corner store in a food desert.
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 K to read as follows:
12	12	SUBCHAPTER K. TAX CREDIT FOR ESTABLISHMENT OF FOOD STORE IN FOOD
13	13	DESERT
14	14	Sec. 171.551. DEFINITIONS. In this subchapter:
15	15	(1) "Corner store" means a store that has fewer than
16	16	2,000 square feet of retail space.
17	17	(2) "Department" means the Texas Department of Housing
18	18	and Community Affairs.
19	19	(3) "Food desert" means a geographic area in this
20	20	state determined by the department to be an area that:
21	21	(A) has limited access to healthy food retailers
22	22	and is located in a low-income or high-poverty area; or
23	23	(B) otherwise has serious healthy food access
24	24	limitations.
25	25	(4) "Grocery store" means a store that has at least:
26	26	(A) 66 percent of the store's retail space
27	27	reserved for the sale of food products;
28	28	(B) 50 percent of the store's food retail space
29	29	reserved for the sale of non-prepared foods or foods intended for
30	30	home preparation and consumption; and
31	31	(C) 30 percent of the store's food retail space
32	32	reserved for the sale of perishable foods, including dairy
33	33	products, fresh produce, fresh meats, poultry, and fish, and frozen
34	34	foods.
35	35	(5) "Healthy corner store" means a corner store that:
36	36	(A) offers a wide variety of fresh produce for
37	37	sale; and
38	38	(B) allocates at least 20 percent of the store's
39	39	retail space to fresh produce and other perishable foods, including
40	40	dairy products.
41	41	(6) "Supplemental nutrition assistance program" means
42	42	the nutritional assistance program operated under Chapter 33, Human
43	43	Resources Code, and formerly referred to as the food stamp program.
44	44	(7) "WIC program" means the federal special
45	45	supplemental nutrition program for women, infants, and children
46	46	authorized by 42 U.S.C. Section 1786.
47	47	Sec. 171.552. ENTITLEMENT TO CREDIT. A taxable entity is
48	48	entitled to a credit in the amount and under the conditions provided
49	49	by this subchapter against the tax imposed under this chapter.
50	50	Sec. 171.553. QUALIFICATION. A taxable entity qualifies
51	51	for a credit under this subchapter if, on or after January 1, 2024,
52	52	the taxable entity opens a grocery store or healthy corner store:
53	53	(1) located in a food desert;
54	54	(2) located in a low or moderate income area, as
55	55	determined by the United States Department of Housing and Urban
56	56	Development, or that serves a customer base living in a low or
57	57	moderate income area;
58	58	(3) that begins accepting benefits under the WIC
59	59	program and the supplemental nutrition assistance program not later
60	60	than the 90th day after the date the store opens; and
61	61	(4) that is open year-round.
62	62	Sec. 171.554. CERTIFICATION OF ELIGIBILITY. (a) Before
63	63	claiming a credit under this subchapter, a taxable entity must
64	64	request from the department a certificate of eligibility on which
65	65	the department certifies that the taxable entity qualifies for a
66	66	credit under Section 171.553. The taxable entity must include with
67	67	the taxable entity's request information required by the department
68	68	to determine whether the taxable entity meets the requirements of
69	69	Section 171.553.
70	70	(b) The department shall issue a certificate of eligibility
71	71	to a taxable entity that qualifies for a credit under Section
72	72	171.553.
73	73	(c) The taxable entity must forward the certificate of
74	74	eligibility and the following documentation to the comptroller to
75	75	claim the credit:
76	76	(1) an audited cost report issued by a certified
77	77	public accountant, as defined by Section 901.002, Occupations Code,
78	78	that itemizes the taxable entity's expenditures to which Section
79	79	171.555 applies;
80	80	(2) the date the grocery store or healthy corner store
81	81	first opened for business and evidence of that opening; and
82	82	(3) an attestation of the total amount of the taxable
83	83	entity's expenditures to which Section 171.555 applies.
84	84	(d) For purposes of approving a credit under this
85	85	subchapter, the comptroller may rely on the audited cost report
86	86	provided by the taxable entity applying for the credit.
87	87	Sec. 171.555. AMOUNT OF CREDIT. (a) A taxable entity may
88	88	claim a credit for each store described by Section 171.553 equal to
89	89	five percent of the amount the taxable entity spends to establish
90	90	the store during the earliest 12-month period:
91	91	(1) in which the taxable entity makes an expenditure
92	92	to which this section applies; and
93	93	(2) that includes the date the store opens for
94	94	business.
95	95	(b) Subsection (a) applies to amounts spent to:
96	96	(1) purchase or lease the land or building for the
97	97	store;
98	98	(2) construct or remodel the store; and
99	99	(3) furnish and equip the store.
100	100	(c) Subsection (a) does not apply to amounts spent to
101	101	acquire inventory for the store.
102	102	Sec. 171.556. LIMITATIONS. (a) The total credit a taxable
103	103	entity may claim under this subchapter for a report, including the
104	104	amount of any credit carryforward under Section 171.558, may not
105	105	exceed 50 percent of the amount of franchise tax due after applying
106	106	all other applicable credits.
107	107	(b) A taxable entity may not convey, assign, or transfer a
108	108	credit under this subchapter to another entity unless all of the
109	109	assets of the taxable entity are conveyed, assigned, or transferred
110	110	in the same transaction.
111	111	Sec. 171.557. PERIOD FOR WHICH CREDIT MAY BE CLAIMED.
112	112	Subject to Section 171.558, a taxable entity may claim a credit
113	113	under this subchapter on a report only for an expenditure made
114	114	during the period on which the report is based.
115	115	Sec. 171.558. CARRYFORWARD. (a) If a taxable entity is
116	116	eligible for a credit that exceeds the limitation under Section
117	117	171.556(a), the taxable entity may carry the unused credit forward
118	118	for not more than five consecutive reports.
119	119	(b) Credits, including credit carryforwards, are considered
120	120	to be used in the following order:
121	121	(1) a credit carryforward under this subchapter; and
122	122	(2) a current year credit.
123	123	Sec. 171.559. APPLICATION FOR CREDIT. A taxable entity
124	124	must apply for a credit under this subchapter on or with the report
125	125	for the period for which the credit is claimed. The comptroller may
126	126	promulgate an application form for the credit under this
127	127	subchapter.
128	128	Sec. 171.560. RULES. (a) The department may adopt rules
129	129	governing the requirements to qualify for a credit under Section
130	130	171.553, including rules governing the stores that qualify as
131	131	grocery stores or healthy corner stores and the areas that qualify
132	132	as food deserts.
133	133	(b) The comptroller may adopt any rules necessary to
134	134	administer this subchapter other than rules described by Subsection
135	135	(a).
136	136	SECTION 2. This Act applies only to a report originally due
137	137	on or after the effective date of this Act.
138	138	SECTION 3. This Act takes effect January 1, 2024.