Texas 2025 - 89th Regular

Texas House Bill HB1937 Compare Versions

Only one version of the bill is available at this time.

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1	1	89R2947 BEF-F
2	2	By: Craddick H.B. No. 1937
3	3
4	4
5	5
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to certain tax and fee collection procedures and taxpayer
10	10	suits.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 111.0041(c), Tax Code, is amended to
13	13	read as follows:
14	14	(c) A taxpayer shall produce sufficient [contemporaneous]
15	15	records and supporting documentation appropriate to the tax or fee
16	16	for the transactions in question to substantiate and enable
17	17	verification of the taxpayer's claim related to the amount of tax,
18	18	penalty, or interest to be assessed, collected, or refunded in an
19	19	administrative or judicial proceeding. Sufficient
20	20	[Contemporaneous] records and supporting documentation appropriate
21	21	to the tax or fee may include[, for example,] invoices, vouchers,
22	22	checks, shipping records, contracts, or other equivalent records,
23	23	such as electronically stored images of such documents, reflecting
24	24	legal relationships and taxes collected or paid.
25	25	SECTION 2. Section 111.0081, Tax Code, is amended by
26	26	amending Subsection (c) and adding Subsection (d) to read as
27	27	follows:
28	28	(c) The amount of a determination made under this code is
29	29	due and payable 20 days after a comptroller's decision in a
30	30	redetermination hearing becomes final. Except as provided by
31	31	Subsection (d), if [If] the amount of the determination is not paid
32	32	within 20 days after the day the decision became final, a penalty of
33	33	10 percent of the amount of the determination, exclusive of
34	34	penalties and interest, shall be added.
35	35	(d) The penalty provided by Subsection (c) is abated with
36	36	respect to the disputed amount that is the subject of a timely filed
37	37	suit under Subchapter E, Chapter 112. If the amount determined to
38	38	be due in a final judgment in the suit is not paid within 20 days
39	39	after the day the judgment became final, a penalty of 10 percent of
40	40	the amount due, exclusive of penalties and interest, shall be
41	41	added.
42	42	SECTION 3. Subchapter A, Chapter 111, Tax Code, is amended
43	43	by adding Section 111.0091 to read as follows:
44	44	Sec. 111.0091. DISPUTING RESULTS OF MANAGED AUDITS: NOTICE
45	45	OF INTENT TO BYPASS REDETERMINATION PROCESS. (a) A person who
46	46	conducts a managed audit authorized by Section 151.0231 or 201.3021
47	47	may file with the comptroller a notice of intent to bypass the
48	48	redetermination process under Section 111.009. The notice of
49	49	intent must:
50	50	(1) be filed on or before the 60th day after the date
51	51	the comptroller issues a letter notifying the person of the results
52	52	of the managed audit;
53	53	(2) be in writing;
54	54	(3) assert the material facts and each specific legal
55	55	basis for disputing the results of the managed audit; and
56	56	(4) specify the amounts of the disputed underpayments
57	57	or overpayments contained in the report of the managed audit
58	58	results.
59	59	(b) A person who files a notice of intent under Subsection
60	60	(a) may bypass the redetermination process under Section 111.009
61	61	and bring a suit under Subchapter D, Chapter 112, if:
62	62	(1) the person participated in a conference under
63	63	Subsection (c), in which case the suit must be filed on or before
64	64	the 60th day after the date the conference concludes or a later date
65	65	agreed to by the comptroller; or
66	66	(2) the comptroller does not provide notice in the
67	67	time required by Subsection (d) that a conference is required, in
68	68	which case the suit must be filed on or before the 90th day after the
69	69	date the notice of intent was filed.
70	70	(c) The comptroller may require a conference between a
71	71	person who files a notice of intent under Subsection (a) and a
72	72	designated officer or employee of the comptroller to clarify any
73	73	fact or legal issue in dispute regarding the results of the managed
74	74	audit and to discuss the availability of additional documentation
75	75	that may assist in resolving outstanding issues regarding the
76	76	managed audit. The person who filed the notice of intent may amend
77	77	a material fact or legal basis described by Subsection (a)(3)
78	78	following the conference if the comptroller agrees in writing to
79	79	the amendment.
80	80	(d) If the comptroller requires a conference under
81	81	Subsection (c), the comptroller shall notify the person of the
82	82	conference requirement not later than the 30th day after the date
83	83	the notice of intent under Subsection (a) was filed. The notice of
84	84	the conference requirement must be in writing and include a date and
85	85	time for the conference. The conference date provided in the notice
86	86	must be not later than the 90th day after the date the notice of
87	87	intent was filed.
88	88	(e) The person who filed the notice of intent under
89	89	Subsection (a) may request to reschedule the conference date
90	90	provided in the notice under Subsection (d). The comptroller shall
91	91	make a good faith effort to accommodate the request. If the
92	92	comptroller and the person who filed the notice of intent do not
93	93	agree on or before the 90th day after the date the notice of intent
94	94	was filed to a rescheduled date for the conference, the person may
95	95	on or before the 120th day after the date the notice of intent was
96	96	filed rescind the notice of intent and petition the comptroller for
97	97	a redetermination under Section 111.009.
98	98	(f) Except as provided by Subsection (e), a person who files
99	99	a notice of intent under Subsection (a) waives the person's right to
100	100	a redetermination under Section 111.009.
101	101	SECTION 4. Section 112.052(d), Tax Code, is amended to read
102	102	as follows:
103	103	(d) A taxpayer shall produce sufficient [contemporaneous]
104	104	records and supporting documentation appropriate to the tax for the
105	105	transactions in question to substantiate and enable verification of
106	106	a taxpayer's claim relating to the amount of the tax, penalty, or
107	107	interest that has been assessed or collected or will be refunded, as
108	108	required by Section 111.0041.
109	109	SECTION 5. The heading to Subchapter D, Chapter 112, Tax
110	110	Code, is amended to read as follows:
111	111	SUBCHAPTER D. SUIT FOR TAX REFUND OR TO DISPUTE RESULTS OF MANAGED
112	112	AUDIT
113	113	SECTION 6. Section 112.151(f), Tax Code, is amended to read
114	114	as follows:
115	115	(f) A taxpayer shall produce sufficient [contemporaneous]
116	116	records and supporting documentation appropriate to the tax or fee
117	117	for the transactions in question to substantiate and enable
118	118	verification of a taxpayer's claim relating to the amount of the
119	119	tax, penalty, or interest that has been assessed or collected or
120	120	will be refunded, as required by Section 111.0041.
121	121	SECTION 7. Subchapter D, Chapter 112, Tax Code, is amended
122	122	by adding Section 112.1511 to read as follows:
123	123	Sec. 112.1511. SUIT TO DISPUTE RESULTS OF MANAGED AUDIT.
124	124	(a) A person may sue the comptroller to dispute the results of a
125	125	managed audit conducted under Section 151.0231 or 201.3021 if the
126	126	person:
127	127	(1) has been issued a letter by the comptroller
128	128	notifying the person of the results of the managed audit; and
129	129	(2) is authorized to bring the suit under Section
130	130	111.0091(b).
131	131	(b) The suit must be brought against both the comptroller
132	132	and the attorney general and must be filed in a district court.
133	133	(c) The suit must be filed during the time provided by
134	134	Section 111.0091(b) or it is barred.
135	135	(d) The amounts of the disputed underpayments or
136	136	overpayments contained in the report of the managed audit results
137	137	must be set out in the original petition. A copy of the notice of
138	138	intent filed under Section 111.0091(a) must be attached to the
139	139	original petition filed with the court and to the copies of the
140	140	original petition served on the comptroller and the attorney
141	141	general.
142	142	(e) A person may not intervene in the suit.
143	143	(f) A taxpayer shall produce sufficient records and
144	144	supporting documentation appropriate to the tax or fee for the
145	145	transactions in question to substantiate and enable verification of
146	146	a taxpayer's claim relating to the amount of the tax, penalty, or
147	147	interest to be assessed, collected, or refunded, as required by
148	148	Section 111.0041, including the amounts of the disputed
149	149	underpayments or overpayments contained in the report of the
150	150	managed audit results.
151	151	(g) After the comptroller has been timely served in a suit
152	152	that complies with this section, the comptroller and the attorney
153	153	general:
154	154	(1) are enjoined from collecting disputed
155	155	underpayments identified in Section 111.0091(a)(4) from the person
156	156	bringing the suit during the pendency of the suit; and
157	157	(2) are not enjoined from:
158	158	(A) asserting tax liens; or
159	159	(B) as an alternative to asserting tax liens,
160	160	requiring the person to provide security:
161	161	(i) in an amount sufficient to secure
162	162	payment of the entire disputed amount, including penalties and
163	163	accrued interest, that is the subject of the suit; and
164	164	(ii) in the form of a cash deposit filed
165	165	with the comptroller or paid into the registry of the court, a
166	166	surety bond, a letter of credit, or another form of guarantee.
167	167	(h) Damages may be awarded under Chapter 65, Civil Practice
168	168	and Remedies Code, if the court determines that all or part of the
169	169	enjoined collection amounts under Subsection (g) were disputed
170	170	solely for delay.
171	171	SECTION 8. Section 112.152, Tax Code, is amended to read as
172	172	follows:
173	173	Sec. 112.152. ISSUES IN SUIT. (a) The only issues that may
174	174	be raised in a suit under this subchapter are, as applicable, the:
175	175	(1) grounds of error contained in the motion for
176	176	rehearing; or
177	177	(2) material facts and legal bases contained in the
178	178	notice of intent filed under Section 111.0091(a) or 111.106(a).
179	179	(b) The suit applies only to a tax liability period
180	180	considered in the comptroller's decision or covered by the notice
181	181	of intent filed under Section 111.0091 or 111.106, as applicable.
182	182	SECTION 9. Section 112.201, Tax Code, is amended by
183	183	amending Subsection (c) and adding Subsections (c-1) and (c-2) to
184	184	read as follows:
185	185	(c) A person bringing a suit under this subchapter may pay
186	186	the disputed amounts as provided by Chapter 111. A disputed amount
187	187	that is not paid as provided by Chapter 111 and that is determined
188	188	to be due in a final judgment accrues penalties and interest as
189	189	provided by Chapter 111.
190	190	(c-1) After the comptroller has been timely served in a suit
191	191	that complies with this subchapter, the comptroller and the
192	192	attorney general:
193	193	(1) are enjoined from collecting disputed amounts from
194	194	the person bringing the suit during the pendency of the suit; and
195	195	(2) [but] are not enjoined from:
196	196	(A) asserting tax liens; or
197	197	(B) as an alternative to asserting tax liens,
198	198	requiring the person to provide security:
199	199	(i) in an amount sufficient to secure
200	200	payment of the entire disputed amount, including penalties and
201	201	accrued interest, that is the subject of the suit; and
202	202	(ii) in the form of a cash deposit filed
203	203	with the comptroller or paid into the registry of the court, a
204	204	surety bond, a letter of credit, or another form of guarantee.
205	205	(c-2) Damages may be awarded under Chapter 65, Civil
206	206	Practice and Remedies Code, if the court determines that all or part
207	207	of the enjoined collection amounts under Subsection (c-1) were
208	208	disputed solely for delay.
209	209	SECTION 10. Section 112.202, Tax Code, is amended to read as
210	210	follows:
211	211	Sec. 112.202. RECORDS. A person shall produce, in
212	212	connection with a suit under this subchapter, sufficient
213	213	[contemporaneous] records and supporting documentation appropriate
214	214	to the tax for the transactions in question to substantiate and
215	215	enable verification of the person's claim relating to the amount of
216	216	the tax, penalty, or interest that has been assessed or collected,
217	217	as required by Section 111.0041.
218	218	SECTION 11. Section 111.105(e), Tax Code, is repealed.
219	219	SECTION 12. This Act applies to a managed audit that is in
220	220	progress and an administrative or judicial proceeding that is
221	221	pending or filed on or after the effective date of this Act, without
222	222	regard to whether the taxes that are the subject of the managed
223	223	audit or proceeding were due before, on, or after that date.
224	224	SECTION 13. This Act takes effect immediately if it
225	225	receives a vote of two-thirds of all the members elected to each
226	226	house, as provided by Section 39, Article III, Texas Constitution.
227	227	If this Act does not receive the vote necessary for immediate
228	228	effect, this Act takes effect September 1, 2025.