88R4553 SRA-D
By: Landgraf H.B. No. 2213
A BILL TO BE ENTITLED
AN ACT
relating to lowering the rates of and repealing the franchise tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. (a) Effective January 1, 2024, Sections
171.002(a) and (b), Tax Code, are amended to read as follows:
(a) Subject to Sections 171.003 and 171.1016 and except as
provided by Subsection (b), the rate of the franchise tax is 0.375
[0.75] percent of taxable margin.
(b) Subject to Sections 171.003 and 171.1016, the rate of
the franchise tax is 0.188 [0.375] percent of taxable margin for
those taxable entities primarily engaged in retail or wholesale
trade.
(b) Effective January 1, 2024, Section 171.1016(b), Tax
Code, is amended to read as follows:
(b) The amount of the tax for which a taxable entity that
elects to pay the tax as provided by this section is liable is
computed by:
(1) determining the taxable entity's total revenue
from its entire business, as determined under Section 171.1011;
(2) apportioning the amount computed under
Subdivision (1) to this state, as provided by Section 171.106, to
determine the taxable entity's apportioned total revenue; and
(3) multiplying the amount computed under Subdivision
(2) by the rate of 0.166 [0.331] percent.
(c) This section applies only to a report originally due on
or after January 1, 2024.
SECTION 2. (a) Effective January 1, 2025, Chapter 171, Tax
Code, is repealed.
(b) A taxable entity that is subject to the franchise tax
imposed under Chapter 171, Tax Code, on December 31, 2024, is not
required to file a franchise tax report or pay a tax on the taxable
entity's taxable margin for the period ending on that date.
(c) Chapter 171, Tax Code, as that chapter existed
immediately before its repeal by this Act, and Subtitle B, Title 2,
Tax Code, continue to apply to audits, deficiencies,
redeterminations, and refunds of any tax due or collected under
Chapter 171 until barred by limitations.
(d) The repeal of Chapter 171, Tax Code, does not affect:
(1) the status of a taxable entity that has had its
corporate privileges, certificate of authority, certificate of
organization, certificate of limited partnership, corporate
charter, or registration revoked, a suit filed against it, or a
receiver appointed under Subchapter F, G, or H of that chapter;
(2) the ability of the comptroller of public accounts,
secretary of state, or attorney general to take action against a
taxable entity under Subchapter F, G, or H of that chapter for
actions that took place before the repeal; or
(3) the right of a taxable entity to contest a
forfeiture, revocation, lawsuit, or appointment of a receiver under
Subchapter F, G, or H of that chapter.
SECTION 3. This Act takes effect January 1, 2024.