| 1 | 1 | | 88R11062 CJD-D |
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| 2 | 2 | | By: Paxton S.B. No. 1605 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the reduction of the rates of the franchise tax. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Sections 171.002(a) and (b), Tax Code, are |
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| 10 | 10 | | amended to read as follows: |
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| 11 | 11 | | (a) Subject to Sections 171.003 and 171.1016 and except as |
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| 12 | 12 | | provided by Subsection (b), the rate of the franchise tax is 0.6 |
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| 13 | 13 | | [0.75] percent of taxable margin. |
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| 14 | 14 | | (b) Subject to Sections 171.003 and 171.1016, the rate of |
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| 15 | 15 | | the franchise tax is 0.3 [0.375] percent of taxable margin for those |
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| 16 | 16 | | taxable entities primarily engaged in retail or wholesale trade. |
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| 17 | 17 | | SECTION 2. Section 171.1016(b), Tax Code, is amended to |
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| 18 | 18 | | read as follows: |
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| 19 | 19 | | (b) The amount of the tax for which a taxable entity that |
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| 20 | 20 | | elects to pay the tax as provided by this section is liable is |
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| 21 | 21 | | computed by: |
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| 22 | 22 | | (1) determining the taxable entity's total revenue |
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| 23 | 23 | | from its entire business, as determined under Section 171.1011; |
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| 24 | 24 | | (2) apportioning the amount computed under |
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| 25 | 25 | | Subdivision (1) to this state, as provided by Section 171.106, to |
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| 26 | 26 | | determine the taxable entity's apportioned total revenue; and |
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| 27 | 27 | | (3) multiplying the amount computed under Subdivision |
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| 28 | 28 | | (2) by the rate of 0.265 [0.331] percent. |
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| 29 | 29 | | SECTION 3. This Act applies only to a report originally due |
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| 30 | 30 | | on or after the effective date of this Act. |
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| 31 | 31 | | SECTION 4. This Act takes effect January 1, 2024. |
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