Texas 2023 - 88th Regular

Texas Senate Bill SB1061 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	88R1133 BEF-D
2	2	By: Schwertner S.B. No. 1061
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the computation of and total revenue exemption for the
8	8	franchise tax.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 171.002(d), Tax Code, is amended to read
11	11	as follows:
12	12	(d) A taxable entity is not required to pay any tax and is
13	13	not considered to owe any tax for a period if:
14	14	(1) the amount of tax computed for the taxable entity
15	15	is less than $1,000; or
16	16	(2) the amount of the taxable entity's total revenue
17	17	from its entire business is less than or equal to $2 [$1] million or
18	18	the amount determined under Section 171.006 per 12-month period on
19	19	which margin is based.
20	20	SECTION 2. Sections 171.101(a) and (b), Tax Code, are
21	21	amended to read as follows:
22	22	(a) The taxable margin of a taxable entity is computed by:
23	23	(1) determining the taxable entity's margin, which is
24	24	the lesser of:
25	25	(A) the amount provided by this paragraph, which
26	26	is the lesser of:
27	27	(i) 70 percent of the taxable entity's total
28	28	revenue from its entire business, as determined under Section
29	29	171.1011; or
30	30	(ii) an amount equal to the taxable entity's
31	31	total revenue from its entire business as determined under Section
32	32	171.1011 minus $2 [$1] million; or
33	33	(B) an amount computed by determining the
34	34	taxable entity's total revenue from its entire business under
35	35	Section 171.1011 and subtracting the greater of:
36	36	(i) $2 [$1] million; or
37	37	(ii) an amount equal to the sum of:
38	38	(a) at the election of the taxable
39	39	entity, either:
40	40	(1) cost of goods sold, as
41	41	determined under Section 171.1012; or
42	42	(2) compensation, as determined
43	43	under Section 171.1013; and
44	44	(b) any compensation, as determined
45	45	under Section 171.1013, paid to an individual during the period the
46	46	individual is serving on active duty as a member of the armed forces
47	47	of the United States if the individual is a resident of this state
48	48	at the time the individual is ordered to active duty and the cost of
49	49	training a replacement for the individual;
50	50	(2) apportioning the taxable entity's margin to this
51	51	state as provided by Section 171.106 to determine the taxable
52	52	entity's apportioned margin; and
53	53	(3) subtracting from the amount computed under
54	54	Subdivision (2) any other allowable deductions to determine the
55	55	taxable entity's taxable margin.
56	56	(b) Notwithstanding Subsection (a)(1)(B)(ii)(a), a
57	57	professional employer organization may subtract only the greater of
58	58	$2 [$1] million as provided by Subsection (a)(1)(B)(i) or
59	59	compensation as determined under Section 171.1013.
60	60	SECTION 3. Section 171.1014(d), Tax Code, is amended to
61	61	read as follows:
62	62	(d) For purposes of Section 171.101, a combined group shall
63	63	make an election to subtract either cost of goods sold or
64	64	compensation that applies to all of its members, or $2 [$1]
65	65	million. Regardless of the election, the taxable margin of the
66	66	combined group may not exceed the amount provided by Section
67	67	171.101(a)(1)(A) for the combined group.
68	68	SECTION 4. This Act applies only to a report originally due
69	69	on or after January 1, 2024.
70	70	SECTION 5. This Act takes effect January 1, 2024.