Texas 2025 - 89th Regular

Texas Senate Bill SB1949 Compare Versions

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

Old	New	Differences
1	1	89R8839 BEF-F
2	2	By: Kolkhorst S.B. No. 1949
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to a refund of sales and use taxes or a credit against the
10	10	franchise tax for certain small employers who contribute to an
11	11	individual coverage health reimbursement arrangement.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Subchapter I, Chapter 151, Tax Code, is amended
14	14	by adding Section 151.4295 to read as follows:
15	15	Sec. 151.4295. TAX REFUND FOR SMALL EMPLOYERS WHO
16	16	CONTRIBUTE TO INDIVIDUAL COVERAGE HEALTH REIMBURSEMENT
17	17	ARRANGEMENT. (a) In this section:
18	18	(1) "Individual coverage health reimbursement
19	19	arrangement" means a health reimbursement arrangement or other
20	20	account-based group health plan that satisfies the conditions of 45
21	21	C.F.R. Section 146.123 to be integrated with individual health
22	22	insurance coverage or with Medicare, as applicable.
23	23	(2) "Small employer" means a person who employed an
24	24	average of at least one employee but not more than 50 employees on
25	25	business days during the preceding calendar year. The term includes
26	26	a governmental entity subject to Article 3.51-1, 3.51-4, or 3.51-5,
27	27	Insurance Code, to Subchapter C, Chapter 1364, Insurance Code, to
28	28	Chapter 1578, Insurance Code, or to Chapter 177, Local Government
29	29	Code, that otherwise meets the requirements of this subdivision.
30	30	For purposes of this definition, a partnership is the employer of a
31	31	partner.
32	32	(b) Except as provided by Subsection (d), a person is
33	33	eligible for a refund in an amount determined under Subsection (c)
34	34	of the taxes the person paid under this chapter during a calendar
35	35	year if the person:
36	36	(1) is a small employer;
37	37	(2) adopts an individual coverage health
38	38	reimbursement arrangement, in lieu of a traditional employer
39	39	provided health insurance plan, for the person's employees for the
40	40	calendar year; and
41	41	(3) contributes to the individual coverage health
42	42	reimbursement arrangement an amount per covered individual for the
43	43	calendar year that is at least equal to:
44	44	(A) if the person previously contributed to an
45	45	employer provided health insurance plan, the annual amount per
46	46	covered individual the person contributed to the employer provided
47	47	health insurance plan for the last year the person contributed to
48	48	the plan; or
49	49	(B) if the person did not previously contribute
50	50	to an employer provided health insurance plan, the least annual
51	51	amount per covered individual the person would be required to
52	52	contribute to obtain any available employer provided health
53	53	insurance plan for the same calendar year.
54	54	(c) The amount of the refund for a calendar year is equal to
55	55	the lesser of:
56	56	(1) the product of $400 and the average number of
57	57	covered individuals for whom the person contributes to an
58	58	individual coverage health reimbursement arrangement during the
59	59	calendar year; and
60	60	(2) the total amount of the taxes the person paid under
61	61	this chapter during the calendar year.
62	62	(d) A person is not eligible for a refund under this section
63	63	for a calendar year if the person will, as a taxable entity as
64	64	defined by Section 171.0002 or as a member of a combined group that
65	65	is a taxable entity, claim a credit under Subchapter N, Chapter 171,
66	66	on a franchise tax report covering any part of that year.
67	67	(e) To receive a refund under this section, a person must
68	68	apply to the comptroller in the manner prescribed by the
69	69	comptroller and include with the application any information
70	70	requested by the comptroller to determine whether the person is
71	71	eligible for the refund or the amount of the refund.
72	72	SECTION 2. Chapter 171, Tax Code, is amended by adding
73	73	Subchapter N to read as follows:
74	74	SUBCHAPTER N. TAX CREDIT FOR SMALL EMPLOYERS WHO CONTRIBUTE TO
75	75	INDIVIDUAL COVERAGE HEALTH REIMBURSEMENT ARRANGEMENT
76	76	Sec. 171.701. DEFINITIONS. In this subchapter, "individual
77	77	coverage health reimbursement arrangement" and "small employer"
78	78	have the meanings assigned by Section 151.4295.
79	79	Sec. 171.702. ENTITLEMENT TO CREDIT. A taxable entity is
80	80	entitled to a credit in the amount and under the conditions provided
81	81	by this subchapter against the tax imposed under this chapter.
82	82	Sec. 171.703. QUALIFICATION. A taxable entity qualifies
83	83	for a credit under this subchapter if the taxable entity:
84	84	(1) is a small employer;
85	85	(2) adopts an individual coverage health
86	86	reimbursement arrangement, in lieu of a traditional employer
87	87	provided health insurance plan, for the taxable entity's employees
88	88	for the entire period on which the report is based; and
89	89	(3) contributes to the individual coverage health
90	90	reimbursement arrangement an annual amount per covered individual
91	91	that is at least equal to:
92	92	(A) if the taxable entity previously contributed
93	93	to an employer provided health insurance plan, the annual amount
94	94	per covered individual the taxable entity contributed to the
95	95	employer provided health insurance plan for the last year the
96	96	taxable entity contributed to the plan; or
97	97	(B) if the taxable entity did not previously
98	98	contribute to an employer provided health insurance plan, the least
99	99	annual amount per covered individual the taxable entity would be
100	100	required to contribute to obtain any available employer provided
101	101	health insurance plan during the period on which the report is
102	102	based.
103	103	Sec. 171.704. INELIGIBILITY FOR CREDIT FOR CERTAIN PERIODS.
104	104	A taxable entity is not eligible for a credit on a report if the
105	105	taxable entity, or a member of the combined group if the taxable
106	106	entity is a combined group, received, for taxes paid under Chapter
107	107	151 during the period on which the report is based, a refund under
108	108	Section 151.4295.
109	109	Sec. 171.705. AMOUNT; LIMITATIONS. (a) The amount of the
110	110	credit for a report that is based on a period of one year is equal to
111	111	the product of $400 and the average number of covered individuals
112	112	for whom the taxable entity contributes to an individual coverage
113	113	health reimbursement arrangement during the period on which the
114	114	report is based.
115	115	(b) The amount of the credit for a report that is based on a
116	116	period other than one year is equal to a pro rata share of the amount
117	117	provided by Subsection (a) that reflects the duration of the period
118	118	on which the report is based.
119	119	(c) The total credit claimed for a report may not exceed the
120	120	amount of franchise tax due for the report after all other
121	121	applicable tax credits.
122	122	Sec. 171.706. APPLICATION FOR CREDIT. A taxable entity
123	123	must apply for a credit under this subchapter on or with the tax
124	124	report for the period for which the credit is claimed and include
125	125	with the application any information requested by the comptroller
126	126	to determine whether the taxable entity is eligible for the credit
127	127	or the amount of the credit.
128	128	SECTION 3. (a) Section 151.4295, Tax Code, as added by this
129	129	Act, applies only in connection with contributions to an individual
130	130	coverage health reimbursement arrangement made on or after January
131	131	1, 2026.
132	132	(b) A person may not file a claim for a refund under Section
133	133	151.4295, Tax Code, as added by this Act, before January 1, 2027.
134	134	SECTION 4. Subchapter N, Chapter 171, Tax Code, as added by
135	135	this Act, applies only to a report originally due on or after
136	136	January 1, 2027, and only in connection with contributions to an
137	137	individual coverage health reimbursement arrangement made on or
138	138	after January 1, 2026.
139	139	SECTION 5. This Act takes effect January 1, 2026.