89R4902 JBD-D
By: Creighton S.B. No. 1231
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for taxable entities that
purchase certain theft deterrent and property loss prevention
equipment.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter N to read as follows:
SUBCHAPTER N. TAX CREDIT FOR PURCHASE OF THEFT DETERRENT AND
PROPERTY LOSS PREVENTION EQUIPMENT
Sec. 171.701. ENTITLEMENT TO CREDIT. A taxable entity is
entitled to a credit in the amount and under the conditions provided
by this subchapter against the tax imposed under this chapter.
Sec. 171.702. QUALIFICATION. A taxable entity qualifies
for a credit under this subchapter if the taxable entity purchases
one or more items of theft deterrent or property loss prevention
equipment included on the list of eligible equipment adopted under
Section 171.707.
Sec. 171.703. AMOUNT OF CREDIT; LIMITATION. (a) Subject to
Subsection (b), the amount of the credit for a report is equal to
the total amount of costs and expenses incurred by a taxable entity
to purchase items described by Section 171.702 during the period on
which the report is based, including the purchase price of those
items.
(b) The total credit claimed on a report, including the
amount of any carryforward under Section 171.704, may not exceed
the amount of franchise tax due for the report after applying all
other applicable credits.
Sec. 171.704. CARRYFORWARD. (a) A taxable entity that is
eligible for a credit that exceeds the limitation under Section
171.703(b) may carry the unused credit forward for not more than
five consecutive reports.
(b) A carryforward is considered the remaining portion of a
credit that cannot be claimed in the current year because of the
limitation under Section 171.703(b).
(c) Credits, including a carryforward, are considered to be
used in the following order:
(1) a carryforward under this subchapter; and
(2) a current year credit.
Sec. 171.705. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the report
for the period for which the credit is claimed.
(b) The comptroller shall prescribe the form and method a
taxable entity must use to apply for the credit.
(c) The comptroller may require a taxable entity to submit
with an application any information needed to determine whether the
taxable entity qualifies for the credit or the amount of the credit.
Sec. 171.706. ASSIGNMENT PROHIBITED; EXEMPTION. A taxable
entity may not convey, assign, or transfer the credit allowed under
this subchapter to another taxable entity unless substantially all
of the assets of the taxable entity are conveyed, assigned, or
transferred in the same transaction.
Sec. 171.707. RULES. The comptroller shall adopt rules
necessary to implement and administer this subchapter, including a
list of equipment useful or necessary to deter theft or prevent
property loss that is eligible for the credit.
SECTION 2. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2026.