By: Perry S.B. No. 952
(In the Senate - Filed February 15, 2023; March 3, 2023,
read first time and referred to Committee on Finance;
April 6, 2023, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 17, Nays 0; April 6, 2023,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 952 By: Perry
A BILL TO BE ENTITLED
AN ACT
relating to certain tax and fee collection procedures and taxpayer
suits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 111.0041(c), Tax Code, is amended to
read as follows:
(c) A taxpayer shall produce sufficient [contemporaneous]
records and supporting documentation appropriate to the tax or fee
for the transactions in question to substantiate and enable
verification of the taxpayer's claim related to the amount of tax,
penalty, or interest to be assessed, collected, or refunded in an
administrative or judicial proceeding. Sufficient
[Contemporaneous] records and supporting documentation appropriate
to the tax or fee may include[, for example,] invoices, vouchers,
checks, shipping records, contracts, or other equivalent records,
such as electronically stored images of such documents, reflecting
legal relationships and taxes collected or paid.
SECTION 2. Section 111.0081, Tax Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) The amount of a determination made under this code is
due and payable 20 days after a comptroller's decision in a
redetermination hearing becomes final. Except as provided by
Subsection (d), if [If] the amount of the determination is not paid
within 20 days after the day the decision became final, a penalty of
10 percent of the amount of the determination, exclusive of
penalties and interest, shall be added.
(d) The penalty provided by Subsection (c) is abated with
respect to the disputed amount that is the subject of a timely filed
suit under Subchapter E, Chapter 112. If the amount determined to
be due in a final judgment in the suit is not paid within 20 days
after the day the judgment became final, a penalty of 10 percent of
the amount due, exclusive of penalties and interest, shall be
added.
SECTION 3. Subchapter A, Chapter 111, Tax Code, is amended
by adding Section 111.0091 to read as follows:
Sec. 111.0091. DISPUTING RESULTS OF MANAGED AUDITS: NOTICE
OF INTENT TO BYPASS REDETERMINATION PROCESS. (a) A person who
conducts a managed audit authorized by Section 151.0231 or 201.3021
may file with the comptroller a notice of intent to bypass the
redetermination process under Section 111.009. The notice of
intent must:
(1) be filed on or before the 60th day after the date
the comptroller issues a letter notifying the person of the results
of the managed audit;
(2) be in writing;
(3) assert the material facts and each specific legal
basis for disputing the results of the managed audit; and
(4) specify the amounts of the disputed underpayments
or overpayments contained in the report of the managed audit
results.
(b) A person who files a notice of intent under Subsection
(a) may bypass the redetermination process under Section 111.009
and bring a suit under Subchapter D, Chapter 112, if:
(1) the person participated in a conference under
Subsection (c), in which case the suit must be filed on or before
the 60th day after the date the conference concludes or a later date
agreed to by the comptroller; or
(2) the comptroller does not provide notice in the
time required by Subsection (d) that a conference is required, in
which case the suit must be filed on or before the 90th day after the
date the notice of intent was filed.
(c) The comptroller may require a conference between a
person who files a notice of intent under Subsection (a) and a
designated officer or employee of the comptroller to clarify any
fact or legal issue in dispute regarding the results of the managed
audit and to discuss the availability of additional documentation
that may assist in resolving outstanding issues regarding the
managed audit. The person who filed the notice of intent may amend
a material fact or legal basis described by Subsection (a)(3)
following the conference if the comptroller agrees in writing to
the amendment.
(d) If the comptroller requires a conference under
Subsection (c), the comptroller shall notify the person of the
conference requirement not later than the 30th day after the date
the notice of intent under Subsection (a) was filed. The notice of
the conference requirement must be in writing and include a date and
time for the conference. The conference date provided in the notice
must be not later than the 90th day after the date the notice of
intent was filed.
(e) The person who filed the notice of intent under
Subsection (a) may request to reschedule the conference date
provided in the notice under Subsection (d). The comptroller shall
make a good faith effort to accommodate the request. If the
comptroller and the person who filed the notice of intent do not
agree on or before the 90th day after the date the notice of intent
was filed to a rescheduled date for the conference, the person may
on or before the 120th day after the date the notice of intent was
filed rescind the notice of intent and petition the comptroller for
a redetermination under Section 111.009.
(f) Except as provided by Subsection (e), a person who files
a notice of intent under Subsection (a) waives the person's right to
a redetermination under Section 111.009.
SECTION 4. Section 112.052(d), Tax Code, is amended to read
as follows:
(d) A taxpayer shall produce sufficient [contemporaneous]
records and supporting documentation appropriate to the tax for the
transactions in question to substantiate and enable verification of
a taxpayer's claim relating to the amount of the tax, penalty, or
interest that has been assessed or collected or will be refunded, as
required by Section 111.0041.
SECTION 5. The heading to Subchapter D, Chapter 112, Tax
Code, is amended to read as follows:
SUBCHAPTER D. SUIT FOR TAX REFUND OR TO DISPUTE RESULTS OF MANAGED
AUDIT
SECTION 6. Section 112.151(f), Tax Code, is amended to read
as follows:
(f) A taxpayer shall produce sufficient [contemporaneous]
records and supporting documentation appropriate to the tax or fee
for the transactions in question to substantiate and enable
verification of a taxpayer's claim relating to the amount of the
tax, penalty, or interest that has been assessed or collected or
will be refunded, as required by Section 111.0041.
SECTION 7. Subchapter D, Chapter 112, Tax Code, is amended
by adding Section 112.1511 to read as follows:
Sec. 112.1511. SUIT TO DISPUTE RESULTS OF MANAGED AUDIT.
(a) A person may sue the comptroller to dispute the results of a
managed audit conducted under Section 151.0231 or 201.3021 if the
person:
(1) has been issued a letter by the comptroller
notifying the person of the results of the managed audit; and
(2) is authorized to bring the suit under Section
111.0091(b).
(b) The suit must be brought against both the comptroller
and the attorney general and must be filed in a district court.
(c) The suit must be filed during the time provided by
Section 111.0091(b) or it is barred.
(d) The amounts of the disputed underpayments or
overpayments contained in the report of the managed audit results
must be set out in the original petition. A copy of the notice of
intent filed under Section 111.0091(a) must be attached to the
original petition filed with the court and to the copies of the
original petition served on the comptroller and the attorney
general.
(e) A person may not intervene in the suit.
(f) A taxpayer shall produce sufficient records and
supporting documentation appropriate to the tax or fee for the
transactions in question to substantiate and enable verification of
a taxpayer's claim relating to the amount of the tax, penalty, or
interest to be assessed, collected, or refunded, as required by
Section 111.0041, including the amounts of the disputed
underpayments or overpayments contained in the report of the
managed audit results.
(g) After the comptroller has been timely served in a suit
that complies with this section, the comptroller and the attorney
general:
(1) are enjoined from collecting disputed
underpayments identified in Section 111.0091(a)(4) from the person
bringing the suit during the pendency of the suit; and
(2) are not enjoined from:
(A) asserting tax liens; or
(B) as an alternative to asserting tax liens,
requiring the person to provide security:
(i) in an amount sufficient to secure
payment of the entire disputed amount, including penalties and
accrued interest, that is the subject of the suit; and
(ii) in the form of a cash deposit filed
with the comptroller or paid into the registry of the court, a
surety bond, a letter of credit, or another form of guarantee.
(h) Damages may be awarded under Chapter 65, Civil Practice
and Remedies Code, if the court determines that all or part of the
enjoined collection amounts under Subsection (g) were disputed
solely for delay.
SECTION 8. Section 112.152, Tax Code, is amended to read as
follows:
Sec. 112.152. ISSUES IN SUIT. (a) The only issues that may
be raised in a suit under this subchapter are, as applicable, the:
(1) grounds of error contained in the motion for
rehearing; or
(2) material facts and legal bases contained in the
notice of intent filed under Section 111.0091(a) or 111.106(a).
(b) The suit applies only to a tax liability period
considered in the comptroller's decision or covered by the notice
of intent filed under Section 111.0091 or 111.106, as applicable.
SECTION 9. Section 112.201, Tax Code, is amended by
amending Subsection (c) and adding Subsections (c-1) and (c-2) to
read as follows:
(c) A person bringing a suit under this subchapter may pay
the disputed amounts as provided by Chapter 111. A disputed amount
that is not paid as provided by Chapter 111 and that is determined
to be due in a final judgment accrues penalties and interest as
provided by Chapter 111.
(c-1) After the comptroller has been timely served in a suit
that complies with this subchapter, the comptroller and the
attorney general:
(1) are enjoined from collecting disputed amounts from
the person bringing the suit during the pendency of the suit; and
(2) [but] are not enjoined from:
(A) asserting tax liens; or
(B) as an alternative to asserting tax liens,
requiring the person to provide security:
(i) in an amount sufficient to secure
payment of the entire disputed amount, including penalties and
accrued interest, that is the subject of the suit; and
(ii) in the form of a cash deposit filed
with the comptroller or paid into the registry of the court, a
surety bond, a letter of credit, or another form of guarantee.
(c-2) Damages may be awarded under Chapter 65, Civil
Practice and Remedies Code, if the court determines that all or part
of the enjoined collection amounts under Subsection (c-1) were
disputed solely for delay.
SECTION 10. Section 112.202, Tax Code, is amended to read as
follows:
Sec. 112.202. RECORDS. A person shall produce, in
connection with a suit under this subchapter, sufficient
[contemporaneous] records and supporting documentation appropriate
to the tax for the transactions in question to substantiate and
enable verification of the person's claim relating to the amount of
the tax, penalty, or interest that has been assessed or collected,
as required by Section 111.0041.
SECTION 11. Section 111.105(e), Tax Code, is repealed.
SECTION 12. This Act applies to a managed audit that is in
progress and an administrative or judicial proceeding that is
pending or filed on or after the effective date of this Act, without
regard to whether the taxes that are the subject of the managed
audit or proceeding were due before, on, or after that date.
SECTION 13. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2023.
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