| 1 | 1 | | 88R4553 SRA-D |
|---|
| 2 | 2 | | By: Landgraf H.B. No. 2213 |
|---|
| 3 | 3 | | |
|---|
| 4 | 4 | | |
|---|
| 5 | 5 | | A BILL TO BE ENTITLED |
|---|
| 6 | 6 | | AN ACT |
|---|
| 7 | 7 | | relating to lowering the rates of and repealing the franchise tax. |
|---|
| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|---|
| 9 | 9 | | SECTION 1. (a) Effective January 1, 2024, Sections |
|---|
| 10 | 10 | | 171.002(a) and (b), Tax Code, are amended to read as follows: |
|---|
| 11 | 11 | | (a) Subject to Sections 171.003 and 171.1016 and except as |
|---|
| 12 | 12 | | provided by Subsection (b), the rate of the franchise tax is 0.375 |
|---|
| 13 | 13 | | [0.75] percent of taxable margin. |
|---|
| 14 | 14 | | (b) Subject to Sections 171.003 and 171.1016, the rate of |
|---|
| 15 | 15 | | the franchise tax is 0.188 [0.375] percent of taxable margin for |
|---|
| 16 | 16 | | those taxable entities primarily engaged in retail or wholesale |
|---|
| 17 | 17 | | trade. |
|---|
| 18 | 18 | | (b) Effective January 1, 2024, Section 171.1016(b), Tax |
|---|
| 19 | 19 | | Code, is amended to read as follows: |
|---|
| 20 | 20 | | (b) The amount of the tax for which a taxable entity that |
|---|
| 21 | 21 | | elects to pay the tax as provided by this section is liable is |
|---|
| 22 | 22 | | computed by: |
|---|
| 23 | 23 | | (1) determining the taxable entity's total revenue |
|---|
| 24 | 24 | | from its entire business, as determined under Section 171.1011; |
|---|
| 25 | 25 | | (2) apportioning the amount computed under |
|---|
| 26 | 26 | | Subdivision (1) to this state, as provided by Section 171.106, to |
|---|
| 27 | 27 | | determine the taxable entity's apportioned total revenue; and |
|---|
| 28 | 28 | | (3) multiplying the amount computed under Subdivision |
|---|
| 29 | 29 | | (2) by the rate of 0.166 [0.331] percent. |
|---|
| 30 | 30 | | (c) This section applies only to a report originally due on |
|---|
| 31 | 31 | | or after January 1, 2024. |
|---|
| 32 | 32 | | SECTION 2. (a) Effective January 1, 2025, Chapter 171, Tax |
|---|
| 33 | 33 | | Code, is repealed. |
|---|
| 34 | 34 | | (b) A taxable entity that is subject to the franchise tax |
|---|
| 35 | 35 | | imposed under Chapter 171, Tax Code, on December 31, 2024, is not |
|---|
| 36 | 36 | | required to file a franchise tax report or pay a tax on the taxable |
|---|
| 37 | 37 | | entity's taxable margin for the period ending on that date. |
|---|
| 38 | 38 | | (c) Chapter 171, Tax Code, as that chapter existed |
|---|
| 39 | 39 | | immediately before its repeal by this Act, and Subtitle B, Title 2, |
|---|
| 40 | 40 | | Tax Code, continue to apply to audits, deficiencies, |
|---|
| 41 | 41 | | redeterminations, and refunds of any tax due or collected under |
|---|
| 42 | 42 | | Chapter 171 until barred by limitations. |
|---|
| 43 | 43 | | (d) The repeal of Chapter 171, Tax Code, does not affect: |
|---|
| 44 | 44 | | (1) the status of a taxable entity that has had its |
|---|
| 45 | 45 | | corporate privileges, certificate of authority, certificate of |
|---|
| 46 | 46 | | organization, certificate of limited partnership, corporate |
|---|
| 47 | 47 | | charter, or registration revoked, a suit filed against it, or a |
|---|
| 48 | 48 | | receiver appointed under Subchapter F, G, or H of that chapter; |
|---|
| 49 | 49 | | (2) the ability of the comptroller of public accounts, |
|---|
| 50 | 50 | | secretary of state, or attorney general to take action against a |
|---|
| 51 | 51 | | taxable entity under Subchapter F, G, or H of that chapter for |
|---|
| 52 | 52 | | actions that took place before the repeal; or |
|---|
| 53 | 53 | | (3) the right of a taxable entity to contest a |
|---|
| 54 | 54 | | forfeiture, revocation, lawsuit, or appointment of a receiver under |
|---|
| 55 | 55 | | Subchapter F, G, or H of that chapter. |
|---|
| 56 | 56 | | SECTION 3. This Act takes effect January 1, 2024. |
|---|