Bill Text: TX HB500 | 2013-2014 | 83rd Legislature | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the computation of the franchise tax, including certain exclusions from the tax.
Spectrum: Strong Partisan Bill (Republican 71-4)
Status: (Passed) 2013-06-14 - See remarks for effective date [HB500 Detail]
Download: Texas-2013-HB500-Engrossed.html
Bill Title: Relating to the computation of the franchise tax, including certain exclusions from the tax.
Spectrum: Strong Partisan Bill (Republican 71-4)
Status: (Passed) 2013-06-14 - See remarks for effective date [HB500 Detail]
Download: Texas-2013-HB500-Engrossed.html
By: Hilderbran, Thompson of Harris, | H.B. No. 500 | |
Creighton, Button, Turner of Collin, |
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relating to the computation of the franchise tax, including certain | ||
exclusions from the tax. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. (a) Section 111.064, Tax Code, is amended by | ||
adding Subsection (g) to read as follows: | ||
(g) For a refund of an amount paid under Chapter 171 that is | ||
claimed after December 31, 2015, and granted for a report period due | ||
on or after January 1, 2000, the rate of interest is the rate set in | ||
Section 111.060. | ||
(b) This section takes effect January 1, 2016. | ||
SECTION 2. Section 171.0001(12), Tax Code, is amended to | ||
read as follows: | ||
(12) "Retail trade" means: | ||
(A) the activities described in Division G of the | ||
1987 Standard Industrial Classification Manual published by the | ||
federal Office of Management and Budget; [ |
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(B) apparel rental activities classified as | ||
Industry 5999 or 7299 of the 1987 Standard Industrial | ||
Classification Manual published by the federal Office of Management | ||
and Budget; | ||
(C) the activities classified as Industry Group | ||
753 of the 1987 Standard Industrial Classification Manual published | ||
by the federal Office of Management and Budget; and | ||
(D) rental-purchase agreement activities | ||
regulated by Chapter 92, Business & Commerce Code. | ||
SECTION 3. Section 171.002, Tax Code, is amended by | ||
amending Subsection (a) and adding Subsection (c-2) to read as | ||
follows: | ||
(a) Subject to Sections 171.003 and 171.1016 and except as | ||
provided by Subsection (b), the rate of the franchise tax is: | ||
(1) one percent of taxable margin; or | ||
(2) for a taxable entity that elects to subtract | ||
compensation under Section 171.1013 for the purpose of computing | ||
its taxable margin, 0.95 percent of taxable margin. | ||
(c-2) Subsection (c)(2) does not apply to total revenue from | ||
activities in a trade that rents or leases tangible personal | ||
property as described by Industry Group 735 of the Standard | ||
Industrial Classification Manual published by the United States | ||
Department of Labor. | ||
SECTION 4. Section 171.006(b), Tax Code, is amended to read | ||
as follows: | ||
(b) Beginning in 2010, on January 1 of each even-numbered | ||
year, the amounts prescribed by Sections 171.002(d)(2) [ |
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equal to the amount prescribed by those sections on December 31 of | ||
the preceding year multiplied by the percentage increase or | ||
decrease during the preceding state fiscal biennium in the consumer | ||
price index and rounded to the nearest $10,000. | ||
SECTION 5. Section 171.052(a), Tax Code, is amended to read | ||
as follows: | ||
(a) Except as provided by Subsection (c), an insurance | ||
organization, title insurance company, or title insurance agent | ||
authorized to engage in insurance business in this state that is | ||
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franchise tax. A nonadmitted insurance organization that is | ||
required to pay a gross premium receipts tax during a tax year is | ||
exempted from the franchise tax for that same tax year. A | ||
nonadmitted insurance organization that is subject to an occupation | ||
tax or any other tax that is imposed for the privilege of doing | ||
business in another state or a foreign jurisdiction, including a | ||
tax on gross premium receipts, is exempted from the franchise tax. | ||
SECTION 6. Sections 171.101(a) and (b), Tax Code, are | ||
amended to read as follows: | ||
(a) The taxable margin of a taxable entity is computed by: | ||
(1) determining the taxable entity's margin, which is | ||
the lesser of: | ||
(A) the amount provided by this paragraph, which | ||
is the lesser of: | ||
(i) 70 percent of the taxable entity's total | ||
revenue from its entire business, as determined under Section | ||
171.1011; or | ||
(ii) an amount equal to the taxable entity's | ||
total revenue from its entire business as determined under Section | ||
171.1011 minus $1 million; or | ||
(B) an amount computed by[ |
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total revenue from its entire business[ |
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and [ |
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(i) $1 million; or | ||
(ii) an amount equal to: | ||
(a) [ |
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entity, either: | ||
(1) [ |
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determined under Section 171.1012; or | ||
(2) [ |
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determined under Section 171.1013; and | ||
(b) any [ |
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an individual during the period the individual is serving on active | ||
duty as a member of the armed forces of the United States if the | ||
individual is a resident of this state at the time the individual is | ||
ordered to active duty and the cost of training a replacement for | ||
the individual; | ||
(2) apportioning the taxable entity's margin to this | ||
state as provided by Section 171.106 to determine the taxable | ||
entity's apportioned margin; and | ||
(3) subtracting from the amount computed under | ||
Subdivision (2) any other allowable deductions to determine the | ||
taxable entity's taxable margin. | ||
(b) Notwithstanding Subsection (a)(1)(B)(ii)(a) | ||
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the greater of $1 million as provided by Subsection (a)(1)(B)(i) or | ||
compensation as determined under Section 171.1013. | ||
SECTION 7. Section 171.1011, Tax Code, is amended by | ||
amending Subsections (g) and (g-4) and adding Subsections (g-8), | ||
(g-9), (g-10), (g-11), (u), (v), (w-1), (x), and (y) to read as | ||
follows: | ||
(g) A taxable entity shall exclude from its total revenue, | ||
to the extent included under Subsection (c)(1)(A), (c)(2)(A), or | ||
(c)(3), only the following flow-through funds that are mandated by | ||
contract or subcontract to be distributed to other entities: | ||
(1) sales commissions to nonemployees, including | ||
split-fee real estate commissions; | ||
(2) the tax basis as determined under the Internal | ||
Revenue Code of securities underwritten; and | ||
(3) subcontracting payments made under a contract or | ||
subcontract entered into [ |
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services, labor, or materials in connection with the actual or | ||
proposed design, construction, remodeling, remediation, or repair | ||
of improvements on real property or the location of the boundaries | ||
of real property. | ||
(g-4) A taxable entity that is a pharmacy cooperative shall | ||
exclude from its total revenue, to the extent included under | ||
Subsection (c)(1)(A), (c)(2)(A), or (c)(3), flow-through funds | ||
from rebates from pharmacy wholesalers that are distributed to the | ||
pharmacy cooperative's shareholders. A taxable entity that | ||
provides a pharmacy network shall exclude from its total revenue, | ||
to the extent included under Subsection (c)(1)(A), (c)(2)(A), or | ||
(c)(3), flow-through funds from rebates from pharmacy wholesalers | ||
that are distributed to pharmacies in the pharmacy network and | ||
flow-through funds from reimbursements for payments to pharmacies | ||
in the pharmacy network. | ||
(g-8) A taxable entity that is primarily engaged in the | ||
business of transporting aggregates shall exclude from its total | ||
revenue, to the extent included under Subsection (c)(1)(A), | ||
(c)(2)(A), or (c)(3), subcontracting payments made by the taxable | ||
entity to nonemployee agents for the performance of delivery | ||
services on behalf of the taxable entity. In this subsection, | ||
"aggregates" means any commonly recognized construction material | ||
removed or extracted from the earth, including dimension stone, | ||
crushed and broken limestone, crushed and broken granite, other | ||
crushed and broken stone, construction sand and gravel, industrial | ||
sand, dirt, soil, cementitious material, and caliche. | ||
(g-9) A taxable entity that is a landlord of commercial | ||
property shall exclude from its total revenue, to the extent | ||
included under Subsection (c)(1)(A), (2)(A), or (3), payments, | ||
excluding expenses for interest and depreciation and other expenses | ||
not listed in this subsection, received from a tenant of the | ||
property for ad valorem taxes and any tax or excise imposed on | ||
rents. | ||
(g-10) A taxable entity that is primarily engaged in the | ||
business of transporting barite shall exclude from its total | ||
revenue, to the extent included under Subsection (c)(1)(A), | ||
(c)(2)(A), or (c)(3), subcontracting payments made by the taxable | ||
entity to nonemployee agents for the performance of transportation | ||
services on behalf of the taxable entity. For purposes of this | ||
subsection, "barite" means barium sulfate (BaSO4), a mineral used | ||
as a weighing agent in oil and gas exploration. | ||
(g-11) A taxable entity that is primarily engaged in the | ||
business of performing landman services shall exclude from its | ||
total revenue, to the extent included under Subsection (c)(1)(A), | ||
(c)(2)(A), or (c)(3), subcontracting payments made by the taxable | ||
entity to nonemployees for the performance of landman services on | ||
behalf of the taxable entity. In this subsection, "landman | ||
services" means: | ||
(1) performing title searches for the purpose of | ||
determining ownership of or curing title defects related to oil, | ||
gas, or other related mineral or petroleum interests; | ||
(2) negotiating the acquisition or divestiture of | ||
mineral rights for the purpose of the exploration, development, or | ||
production of oil, gas, or other related mineral or petroleum | ||
interests; or | ||
(3) negotiating or managing the negotiation of | ||
contracts or other agreements related to the ownership of mineral | ||
interests for the exploration, exploitation, disposition, | ||
development, or production of oil, gas, or other related mineral or | ||
petroleum interests. | ||
(u) A taxable entity shall exclude from its total revenue | ||
the actual cost paid by the taxable entity for a vaccine. | ||
(v) A taxable entity primarily engaged in the business of | ||
transporting commodities by waterways that does not subtract cost | ||
of goods sold in computing its taxable margin shall exclude from its | ||
total revenue direct costs of providing inbound and outbound | ||
transportation services by intrastate or interstate waterways to | ||
the same extent that a taxable entity that sells in the ordinary | ||
course of business real or tangible personal property would be | ||
authorized by Section 171.1012 to subtract those costs as costs of | ||
goods sold in computing its taxable margin. | ||
(w-1) A taxable entity primarily engaged in the business of | ||
providing services as an agricultural aircraft operation, as | ||
defined by 14 C.F.R. Section 137.3, shall exclude from its total | ||
revenue the cost of labor, equipment, fuel, and materials used in | ||
providing those services. | ||
(x) A taxable entity that is registered as a motor carrier | ||
under Chapter 643, Transportation Code, shall exclude from its | ||
total revenue, to the extent included under Subsection (c)(1)(A), | ||
(c)(2)(A), or (c)(3), flow-through revenue derived from taxes and | ||
fees. | ||
(y) A taxable entity shall exclude from its total revenue, | ||
to the extent included under Subsection (c)(1)(A), (c)(2)(A), or | ||
(c)(3) but not subtracted as a cost of goods sold on the report or on | ||
a previous report, the depreciation used to calculate gain or loss | ||
on the disposition of real property held primarily for the | ||
production of rental income. | ||
SECTION 8. Section 171.1011(p), Tax Code, is amended by | ||
adding Subdivision (8) to read as follows: | ||
(8) "Vaccine" means a preparation or suspension of | ||
dead, live attenuated, or live fully virulent viruses or bacteria, | ||
or of antigenic proteins derived from them, used to prevent, | ||
ameliorate, or treat an infectious disease. | ||
SECTION 9. Section 171.1012, Tax Code, is amended by | ||
amending Subsection (f) and adding Subsections (k-2), (k-3), (p), | ||
(q), (r), and (s) to read as follows: | ||
(f) A taxable entity may subtract as a cost of goods sold | ||
indirect or administrative overhead costs, including all mixed | ||
service costs, such as security services, legal services, data | ||
processing services, accounting services, personnel operations, | ||
and general financial planning and financial management costs, that | ||
it can demonstrate are allocable to the acquisition or production | ||
of goods, except that the amount subtracted may not exceed 5.5 | ||
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administrative overhead costs, including all mixed service costs. | ||
Any costs excluded under Subsection (e) may not be subtracted under | ||
this subsection. | ||
(k-2) This subsection applies only to a pipeline entity: (1) | ||
that owns or leases and operates the pipeline by which the product | ||
is transported for others and only to that portion of the product to | ||
which the entity does not own title; and (2) that is primarily | ||
engaged in gathering, storing, transporting, or processing crude | ||
oil, including finished petroleum products, natural gas, | ||
condensate, and natural gas liquids, except for a refinery | ||
installation that manufactures finished petroleum products from | ||
crude oil. Notwithstanding Subsection (e)(3) or (i), a pipeline | ||
entity providing services for others related to the product that | ||
the pipeline does not own and to which this subsection applies may | ||
subtract as a cost of goods sold its depreciation, operations, and | ||
maintenance costs allowed by this section related to the services | ||
provided. | ||
(k-3) For purposes of Subsection (k-2), "processing" means | ||
the physical or mechanical removal, separation, or treatment of | ||
crude oil, including finished petroleum products, natural gas, | ||
condensate, and natural gas liquids after those materials are | ||
produced from the earth. The term does not include the chemical or | ||
biological transformation of those materials. | ||
(p) Notwithstanding Subsection (e)(2) or any other | ||
provision of this section, the cost of goods sold includes 20 | ||
percent of the costs attributable to the acceptance of credit cards | ||
and debit cards as a means of payment. | ||
(q) Notwithstanding Subsection (i) or any other provision | ||
of this section, a taxable entity that is primarily engaged in the | ||
business of harvesting trees for wood may subtract as cost of goods | ||
sold the direct costs of acquiring or producing the timber for the | ||
wood that are specified by this subsection or otherwise described | ||
by this section, regardless of whether the taxable entity owns the | ||
land from which the trees are harvested, the harvested timber, or | ||
the wood resulting from the harvested timber. For purposes of this | ||
subsection, direct costs include costs of: | ||
(1) moving harvesting equipment; | ||
(2) severing timber; | ||
(3) transporting timber to and from a mill or | ||
designated delivery point; | ||
(4) obtaining, using, storing, or maintaining | ||
equipment necessary for an activity described by Subdivision (1), | ||
(2), or (3); and | ||
(5) other supplies, labor, freight, and fuel necessary | ||
for an activity described by Subdivision (1), (2), or (3). | ||
(r) A taxable entity that has total revenue from its entire | ||
business of less than $5 million and that elects to subtract cost of | ||
goods sold for the purpose of computing its taxable margin may elect | ||
to determine the amount of that cost of goods sold in accordance | ||
with this subsection. A taxable entity making the election | ||
authorized by this subsection is not subject to the provisions of | ||
this section relating to the computation of the amount of cost of | ||
goods sold other than this subsection and Subsection (s). The | ||
taxable entity shall determine the amount of cost of goods sold as | ||
follows: | ||
(1) for a taxable entity treated for federal income | ||
tax purposes as a corporation, the cost of goods sold is the amount | ||
reportable as cost of goods sold on line 2, Internal Revenue Service | ||
Form 1120; | ||
(2) for a taxable entity treated for federal income | ||
tax purposes as a partnership, the cost of goods sold is the amount | ||
reportable as cost of goods sold on line 2, Internal Revenue Service | ||
Form 1065; | ||
(3) for a taxable entity treated for federal income | ||
tax purposes as an S corporation, the cost of goods sold is the | ||
amount reportable as cost of goods sold on line 2, Internal Revenue | ||
Service Form 1120S; or | ||
(4) for any other taxable entity, the cost of goods | ||
sold is an amount determined in a manner substantially equivalent | ||
to the amount for Subdivision (1), (2), or (3) determined by rules | ||
the comptroller shall adopt. | ||
(s) A combined group that has total revenue from its entire | ||
business of less than $5 million and that elects to subtract cost of | ||
goods sold for the purpose of computing its taxable margin shall | ||
make the election to compute the amount of that cost of goods sold | ||
under Subsection (r), or to compute that amount under the other | ||
provisions of this section, for all of its members. | ||
SECTION 10. (a) Section 171.1012, Tax Code, is amended by | ||
adding Subsection (t) to read as follows: | ||
(t) If a taxable entity that is a movie theater elects to | ||
subtract cost of goods sold, the cost of goods sold for the taxable | ||
entity shall be the costs described by this section in relation to | ||
the acquisition, production, exhibition, or use of a film or motion | ||
picture, including expenses for the right to use the film or motion | ||
picture. | ||
(b) Section 171.1012(t), Tax Code, as added by this section, | ||
is a clarification of existing law and does not imply that existing | ||
law may be construed as inconsistent with the law as amended by this | ||
section. | ||
(c) This section takes effect September 1, 2013. | ||
SECTION 11. Section 171.1013(a), Tax Code, is amended to | ||
read as follows: | ||
(a) Except as otherwise provided by this section, "wages and | ||
cash compensation" means the amount entered in the Medicare wages | ||
and tips box of Internal Revenue Service Form W-2 or any subsequent | ||
form with a different number or designation that substantially | ||
provides the same information. The term also includes, to the | ||
extent not included above: | ||
(1) net distributive income from a taxable entity | ||
treated as a partnership for federal income tax purposes, but only | ||
if the person receiving the distribution is a natural person; | ||
(2) net distributive income from limited liability | ||
companies and corporations treated as S corporations for federal | ||
income tax purposes, but only if the person receiving the | ||
distribution is a natural person; | ||
(3) stock awards and stock options deducted for | ||
federal income tax purposes; [ |
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(4) net distributive income from a limited liability | ||
company treated as a sole proprietorship for federal income tax | ||
purposes, but only if the person receiving the distribution is a | ||
natural person; and | ||
(5) salaries or other compensation deducted for | ||
federal income tax purposes of employees located outside the United | ||
States for which the employer is not required to issue an Internal | ||
Revenue Service Form W-2. | ||
SECTION 12. Section 171.1014, Tax Code, is amended by | ||
amending Subsections (d) and (d-1) and adding Subsection (j) to | ||
read as follows: | ||
(d) For purposes of Section 171.101, a combined group shall | ||
make an election to subtract either cost of goods sold or | ||
compensation that applies to all of its members, or $1 million. | ||
Regardless of the election, the taxable margin of the combined | ||
group may not exceed the amount [ |
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171.101(a)(1)(A) for the combined group. | ||
(d-1) A member of a combined group that does not elect to | ||
compute the amount of cost of goods sold as provided by Section | ||
171.1012(r), if applicable, may claim as cost of goods sold those | ||
costs that qualify under Section 171.1012 if the goods for which the | ||
costs are incurred are owned by another member of the combined | ||
group. | ||
(j) Notwithstanding any other provision of this section, a | ||
taxable entity that provides retail or wholesale electric utilities | ||
may not be included as a member of a combined group that includes | ||
one or more taxable entities that do not provide retail or wholesale | ||
electric utilities if that combined group in the absence of this | ||
subsection: | ||
(1) would not meet the requirements of Section | ||
171.002(c) solely because one or more members of the combined group | ||
provide retail or wholesale electric utilities; and | ||
(2) would have less than five percent of the combined | ||
group's total revenue derived from providing retail or wholesale | ||
electric utilities. | ||
SECTION 13. Section 171.106, Tax Code, is amended by adding | ||
Subsection (g) to read as follows: | ||
(g) A receipt from Internet hosting as defined by Section | ||
151.108(a) is a receipt from business done in this state only if the | ||
customer to whom the service is provided is located in this state. | ||
SECTION 14. Section 171.106, Tax Code, is amended by adding | ||
Subsection (h) to read as follows: | ||
(h) A taxable entity that is a broadcaster shall include in | ||
the numerator of the broadcaster's apportionment factor receipts | ||
arising from a broadcast or other distribution of film by any means | ||
only if the legal domicile of the broadcaster's customer is in this | ||
state. This subsection applies only to receipts that are licensing | ||
income from distributing film programming. In this subsection: | ||
(1) "Broadcaster" means a taxable entity, not | ||
including a cable service provider or a direct broadcast satellite | ||
service, that is a: | ||
(A) television or radio station licensed by the | ||
Federal Communications Commission; | ||
(B) television or radio broadcast network; | ||
(C) cable television network; or | ||
(D) television distribution company. | ||
(2) "Customer" means a person, including a licensee, | ||
that has a direct connection or contractual relationship with a | ||
broadcaster under which the broadcaster derives revenue. | ||
(3) "Film programming" means all or part of a live or | ||
recorded performance, event, or production intended to be | ||
distributed for visual and auditory perception by an audience. | ||
(4) "Programming" includes news, entertainment, | ||
sporting events, plays, stories, or other literary, commercial, | ||
educational, or artistic works. | ||
SECTION 15. (a) Subchapter C, Chapter 171, Tax Code, is | ||
amended by adding Section 171.109 to read as follows: | ||
Sec. 171.109. DEDUCTION OF RELOCATION COSTS BY CERTAIN | ||
TAXABLE ENTITIES FROM MARGIN APPORTIONED TO THIS STATE. (a) In | ||
this section, "relocation costs" means the costs incurred by a | ||
taxable entity to relocate the taxable entity's main office or | ||
other principal place of business from one location to another. The | ||
term includes: | ||
(1) costs of relocating computers and peripherals, | ||
other business supplies, furniture, and inventory; and | ||
(2) any other costs related to the relocation that are | ||
allowable deductions for federal income tax purposes. | ||
(b) Subject to Subsection (c), a taxable entity may deduct | ||
from its apportioned margin relocation costs incurred in relocating | ||
the taxable entity's main office or other principal place of | ||
business to this state from another state if the taxable entity: | ||
(1) did not do business in this state before | ||
relocating the taxable entity's main office or other principal | ||
place of business to this state; and | ||
(2) is not a member of an affiliated group engaged in a | ||
unitary business, another member of which is doing business in this | ||
state on the date the taxable entity relocates the taxable entity's | ||
main office or other principal place of business to this state. | ||
(c) A taxable entity must take the deduction authorized by | ||
Subsection (b) on the report based on the taxable entity's initial | ||
period described by Section 171.151(1). | ||
(d) On the comptroller's request, a taxable entity that | ||
takes a deduction authorized by this section shall file with the | ||
comptroller proof of the deducted relocation costs. | ||
(b) The change in law made by this section applies only to a | ||
taxable entity that relocates the taxable entity's main office or | ||
other principal place of business to this state on or after the | ||
effective date of this section. | ||
(c) This section takes effect September 1, 2013. | ||
SECTION 16. Subchapter D, Chapter 171, Tax Code, is amended | ||
by adding Section 171.159 to read as follows: | ||
Sec. 171.159. RETAILER RECEIPT SHOWING TAX. (a) A taxable | ||
entity that is a retailer subject to Chapter 151 shall include on | ||
any receipt for an item subject to taxation under Chapter 151 an | ||
additional notation showing the amount of taxes the customer is | ||
paying for the purpose of reimbursement of the tax under this | ||
chapter. | ||
(b) For purposes of this section, the taxable entity may | ||
estimate the amount of tax the customer is paying under this chapter | ||
based on the tax rate to which the taxable entity is subject. | ||
SECTION 17. Subchapter E, Chapter 171, Tax Code, is amended | ||
by adding Section 171.216 to read as follows: | ||
Sec. 171.216. BIENNIAL REPORT. Not later than January 1 of | ||
each odd-numbered year, the comptroller shall submit to the | ||
legislature and the governor a report prepared by an independent | ||
researcher from a research center established under Section 1.005, | ||
Education Code, or a tier one research university, on tax relief, | ||
including tax credits and exemptions, provided to taxable entities | ||
through changes to the tax imposed under this chapter enacted by the | ||
83rd Legislature, Regular Session, 2013, for economic development | ||
purposes, as determined by the comptroller. The report must | ||
include: | ||
(1) an estimate of: | ||
(A) the total number of taxable entities that | ||
received tax relief during the preceding two calendar years as a | ||
result of those changes; and | ||
(B) the total amount of the tax relief described | ||
by Paragraph (A); and | ||
(2) an evaluation of the effects of the tax relief on | ||
this state, including the effects on: | ||
(A) employment in this state; | ||
(B) other economic activity in this state; and | ||
(C) state tax revenues. | ||
SECTION 18. Effective January 1, 2016, Chapter 171, Tax | ||
Code, is amended by adding Subchapters P-1 and Q-2 to read as | ||
follows: | ||
SUBCHAPTER P-1. TAX CREDITS FOR CERTAIN | ||
JOB CREATION ACTIVITIES | ||
Sec. 171.771. DEFINITIONS. In this subchapter: | ||
(1) "Agricultural processing" means an establishment | ||
primarily engaged in activities described in categories 0724, | ||
2011-2099, 2211, 2231, 2824, 2833, 2834, 2835, 2836, 2841, | ||
3111-3199, 3262, or 3952, in product classes 28692 or 28698 of | ||
category 2869, or in product classes 28992 or 28994 of category 2899 | ||
of the 1987 Standard Industrial Classification Manual published by | ||
the United States Department of Labor. | ||
(2) "Central administrative offices" means an | ||
establishment primarily engaged in performing management or | ||
support services for other establishments of the same enterprise. | ||
An enterprise consists of all establishments having more than 50 | ||
percent common direct or indirect ownership. | ||
(3) "Data processing" means an establishment | ||
primarily engaged in activities described in categories 7371-7379 | ||
of the 1987 Standard Industrial Classification Manual published by | ||
the United States Department of Labor. | ||
(4) "Distribution" means an establishment primarily | ||
engaged in activities described in categories 5012-5199 of the 1987 | ||
Standard Industrial Classification Manual published by the United | ||
States Department of Labor. | ||
(5) "Group health benefit plan" means: | ||
(A) a health plan provided by a health | ||
maintenance organization established under Chapter 843, Insurance | ||
Code; | ||
(B) a health benefit plan approved by the | ||
commissioner of insurance; or | ||
(C) a self-funded or self-insured employee | ||
welfare benefit plan that provides health benefits and is | ||
established in accordance with the Employee Retirement Income | ||
Security Act of 1974 (29 U.S.C. Section 1001 et seq.). | ||
(6) "Manufacturing" means an establishment primarily | ||
engaged in activities described in categories 2011-3999 of the 1987 | ||
Standard Industrial Classification Manual published by the United | ||
States Department of Labor. | ||
(7) "Qualified business" means an establishment | ||
primarily engaged in agricultural processing, central | ||
administrative offices, distribution, data processing, | ||
manufacturing, research and development, or warehousing. | ||
(8) "Qualifying job" means a new permanent full-time | ||
job that: | ||
(A) pays an annual wage of at least $50,000, | ||
subject to Section 171.772; | ||
(B) is covered by a group health benefit plan for | ||
which the business pays at least 80 percent of the premiums or other | ||
charges assessed under the plan for the employee; and | ||
(C) is not created to replace a previous | ||
employee. | ||
(9) "Research and development" means an establishment | ||
primarily engaged in activities described in category 8731 of the | ||
1987 Standard Industrial Classification Manual published by the | ||
United States Department of Labor. | ||
(10) "Warehousing" means an establishment primarily | ||
engaged in activities described in categories 4221-4226 of the 1987 | ||
Standard Industrial Classification Manual published by the United | ||
States Department of Labor. | ||
Sec. 171.772. BIENNIAL ADJUSTMENT OF WAGE FOR QUALIFYING | ||
JOB. (a) In this section, "consumer price index" means the average | ||
over a state fiscal biennium of the Consumer Price Index for All | ||
Urban Consumers (CPI-U), U.S. City Average, published monthly by | ||
the United States Bureau of Labor Statistics, or its successor in | ||
function. | ||
(b) Beginning in 2016, on January 1 of each even-numbered | ||
year, the wage amount prescribed by Section 171.771(8) is increased | ||
or decreased by an amount equal to the amount prescribed by that | ||
section on December 31 of the preceding year multiplied by the | ||
percentage increase or decrease during the preceding state fiscal | ||
biennium in the consumer price index and rounded to the nearest | ||
dollar. | ||
(c) The amount determined under Subsection (b) applies to a | ||
report originally due on or after the date the determination is | ||
made. | ||
(d) The comptroller shall make the determination required | ||
by this section and may adopt rules related to making that | ||
determination. | ||
(e) A determination by the comptroller under this section is | ||
final and may not be appealed. | ||
Sec. 171.773. ELIGIBILITY. A taxable entity is eligible for | ||
a credit against the tax imposed under this chapter if the taxable | ||
entity: | ||
(1) is a qualified business; and | ||
(2) creates a minimum of 10 qualifying jobs. | ||
Sec. 171.774. AMOUNT OF CREDIT. A taxable entity may | ||
establish a credit equal to 25 percent of the total wages paid by | ||
the taxable entity for each qualifying job during each of the first | ||
12 months of employment of the person hired to perform the job that | ||
occur during the period on which the report is based. | ||
Sec. 171.775. LENGTH OF CREDIT. The credit established | ||
shall be claimed in five equal installments of one-fifth the credit | ||
amount over the five consecutive reports beginning with the report | ||
based on the period during which the qualifying jobs were created. | ||
Sec. 171.776. LIMITATIONS. (a) The total credit claimed | ||
under this subchapter for a report, including the amount of any | ||
carryforward credit under Section 171.777, may not exceed 50 | ||
percent of the amount of franchise tax due for the report before any | ||
other applicable tax credits. | ||
(b) The total credit claimed under this subchapter and | ||
Subchapter Q-2 for a report, including the amount of any | ||
carryforward credits, may not exceed the amount of franchise tax | ||
due for the report after any other applicable credits. | ||
Sec. 171.777. CARRYFORWARD. (a) If a taxable entity is | ||
eligible for a credit that exceeds the limitations under Section | ||
171.776, the taxable entity may carry the unused credit forward for | ||
not more than five consecutive reports. | ||
(b) A carryforward is considered the remaining portion of an | ||
installment that cannot be claimed in the current year because of a | ||
limitation under Section 171.776. A carryforward is added to the | ||
next year's installment of the credit in determining the limitation | ||
for that year. A credit carryforward from a previous report is | ||
considered to be used before the current year installment. | ||
Sec. 171.778. CERTIFICATION OF ELIGIBILITY. (a) For the | ||
initial and each succeeding report on which a credit is claimed | ||
under this subchapter, the taxable entity shall file with its | ||
report, on a form provided by the comptroller, information that | ||
sufficiently demonstrates that the taxable entity is eligible for | ||
the credit. | ||
(b) The burden of establishing entitlement to and the value | ||
of the credit is on the taxable entity. | ||
(c) A credit expires under this subchapter and the taxable | ||
entity may not take any remaining installment of the credit if in | ||
one of the five years in which the installment of a credit accrues, | ||
the taxable entity fails to maintain the minimum number of | ||
qualifying jobs required to be created by Section 171.773. | ||
(d) Notwithstanding Subsection (c), the taxable entity may | ||
take the portion of an installment that accrued in a previous year | ||
and was carried forward to the extent permitted under Section | ||
171.777. | ||
Sec. 171.779. ASSIGNMENT PROHIBITED. A taxable entity may | ||
not convey, assign, or transfer the credit allowed under this | ||
subchapter to another entity unless all of the assets of the taxable | ||
entity are conveyed, assigned, or transferred in the same | ||
transaction. | ||
Sec. 171.780. BIENNIAL REPORT BY COMPTROLLER. (a) Before | ||
the beginning of each regular session of the legislature, the | ||
comptroller shall submit to the governor, the lieutenant governor, | ||
and the speaker of the house of representatives a report that | ||
states: | ||
(1) the total number of jobs created by taxable | ||
entities that claim a credit under this subchapter and the average | ||
and median annual wage of those jobs; | ||
(2) the total amount of credits applied against the | ||
tax under this chapter and the amount of unused credits including: | ||
(A) the total amount of franchise tax due by | ||
taxable entities claiming a credit under this subchapter before and | ||
after the application of the credit; | ||
(B) the average percentage reduction in | ||
franchise tax due by taxable entities claiming a credit under this | ||
subchapter; and | ||
(C) the percentage of tax credits that were | ||
awarded to taxable entities with fewer than 100 employees; | ||
(3) the two-digit standard industrial classification | ||
of businesses claiming a credit under this subchapter; | ||
(4) the geographical distribution of the credits | ||
claimed under this subchapter; and | ||
(5) the effect of the credit provided under this | ||
subchapter on employment, personal income, and capital investment | ||
in this state and on state tax revenues. | ||
(b) The final report issued before the expiration of this | ||
subchapter must include historical information on the credit | ||
authorized under this subchapter. | ||
(c) The comptroller may not include in the report | ||
information that is confidential by law. | ||
(d) For purposes of this section, the comptroller may | ||
require a taxable entity that claims a credit under this subchapter | ||
to submit information, on a form provided by the comptroller, on the | ||
location of the taxable entity's job creation in this state and any | ||
other information necessary to complete the report required under | ||
this section. | ||
(e) The comptroller shall provide notice to the members of | ||
the legislature that the report required under this section is | ||
available on request. | ||
Sec. 171.781. COMPTROLLER POWERS AND DUTIES. The | ||
comptroller shall adopt rules and forms necessary to implement this | ||
subchapter. | ||
Sec. 171.782. EXPIRATION. (a) This subchapter expires | ||
December 31, 2025. | ||
(b) The expiration of this subchapter does not affect the | ||
carryforward of a credit under Section 171.777 or those credits for | ||
which a taxable entity is eligible before the date this subchapter | ||
expires. | ||
SUBCHAPTER Q-2. TAX CREDITS FOR CERTAIN CAPITAL INVESTMENTS | ||
Sec. 171.821. DEFINITIONS. In this subchapter: | ||
(1) "Agricultural processing" and "qualified | ||
business" have the meanings assigned those terms by Section | ||
171.771. | ||
(2) "Qualified capital investment" means tangible | ||
personal property first placed in service in this state by a taxable | ||
entity primarily engaged in agricultural processing, and that is | ||
described in Section 1245(a), Internal Revenue Code, such as | ||
engines, machinery, tools, and implements used in a trade or | ||
business or held for investment and subject to an allowance for | ||
depreciation, cost recovery under the accelerated cost recovery | ||
system, or amortization. The term does not include real property or | ||
buildings and their structural components. Property that is leased | ||
under a capitalized lease is considered a "qualified capital | ||
investment," but property that is leased under an operating lease | ||
is not considered a "qualified capital investment." Property | ||
expensed under Section 179, Internal Revenue Code, is not | ||
considered a "qualified capital investment." | ||
Sec. 171.822. ELIGIBILITY. (a) A qualified business is | ||
eligible for a credit against the tax imposed under this chapter in | ||
the amount and under the conditions and limitations provided by | ||
this subchapter. | ||
(b) To qualify for the credit authorized under this | ||
subchapter, a qualified business must: | ||
(1) pay an annual wage of at least the amount required | ||
for a qualifying job as defined by Section 171.771 for the period on | ||
which the report is based; | ||
(2) offer health benefits coverage to all full-time | ||
employees at the location with respect to which the credit is | ||
claimed through a group health benefit plan, as defined by Section | ||
171.771, for which the business pays at least 80 percent of the | ||
premiums or other charges assessed under the plan for the | ||
employees; and | ||
(3) make a minimum $500,000 qualified capital | ||
investment. | ||
Sec. 171.823. AMOUNT OF CREDIT. A taxable entity may | ||
establish a credit equal to 7.5 percent of the qualified capital | ||
investment during the period on which the report is based. | ||
Sec. 171.824. LENGTH OF CREDIT. The credit established | ||
shall be claimed in five equal installments of one-fifth the credit | ||
amount over the five consecutive reports beginning with the report | ||
based on the period during which the qualified capital investment | ||
was made. | ||
Sec. 171.825. LIMITATIONS. (a) The total credit claimed | ||
under this subchapter for a report, including the amount of any | ||
carryforward credit under Section 171.826, may not exceed 50 | ||
percent of the amount of franchise tax due for the report before any | ||
other applicable tax credits. | ||
(b) The total credit claimed under this subchapter and | ||
Subchapter P-1 for a report, including the amount of any | ||
carryforward credits, may not exceed the amount of franchise tax | ||
due for the report after any other applicable tax credits. | ||
Sec. 171.826. CARRYFORWARD. (a) If a taxable entity is | ||
eligible for a credit from an installment that exceeds the | ||
limitation under Section 171.825, the taxable entity may carry the | ||
unused credit forward for not more than five consecutive reports. | ||
(b) A carryforward is considered the remaining portion of an | ||
installment that cannot be claimed in the current year because of a | ||
limitation under Section 171.825. A carryforward is added to the | ||
next year's installment of the credit in determining the limitation | ||
for that year. A credit carryforward from a previous report is | ||
considered to be used before the current year installment. | ||
Sec. 171.827. CERTIFICATION OF ELIGIBILITY. (a) For the | ||
initial and each succeeding report on which a credit is claimed | ||
under this subchapter, the taxable entity shall file with its | ||
report, on a form provided by the comptroller, information that | ||
sufficiently demonstrates that the taxable entity is eligible for | ||
the credit. | ||
(b) The burden of establishing entitlement to and the value | ||
of the credit is on the taxable entity. | ||
(c) A credit expires under this subchapter and the taxable | ||
entity may not take any remaining installment of the credit if in | ||
one of the five years in which the installment of a credit accrues, | ||
the taxable entity: | ||
(1) disposes of the qualified capital investment; | ||
(2) takes the qualified capital investment out of | ||
service; | ||
(3) moves the qualified capital investment out of this | ||
state; or | ||
(4) fails to pay the annual wage required for a | ||
qualifying job under Section 171.771 for the period covered by the | ||
report on which the taxable entity would otherwise claim the | ||
credit. | ||
(d) Notwithstanding Subsection (c), the taxable entity may | ||
take the portion of an installment that accrued in a previous year | ||
and was carried forward to the extent permitted under Section | ||
171.826. | ||
Sec. 171.828. ASSIGNMENT PROHIBITED. A taxable entity may | ||
not convey, assign, or transfer the credit allowed under this | ||
subchapter to another entity unless all of the assets of the taxable | ||
entity are conveyed, assigned, or transferred in the same | ||
transaction. | ||
Sec. 171.829. BIENNIAL REPORT BY COMPTROLLER. (a) Before | ||
the beginning of each regular session of the legislature, the | ||
comptroller shall submit to the governor, the lieutenant governor, | ||
and the speaker of the house of representatives a report that | ||
states: | ||
(1) the total amount of qualified capital investments | ||
made by taxable entities that claim a credit under this subchapter | ||
and the average and median wages paid by those taxable entities; | ||
(2) the total amount of credits applied against the | ||
tax under this chapter and the amount of unused credits, including: | ||
(A) the total amount of franchise tax due by | ||
taxable entities claiming a credit under this subchapter before and | ||
after the application of the credit; | ||
(B) the average percentage reduction in | ||
franchise tax due by taxable entities claiming a credit under this | ||
subchapter; | ||
(C) the percentage of tax credits that were | ||
awarded to taxable entities with fewer than 100 employees; and | ||
(D) the two-digit standard industrial | ||
classification of taxable entities claiming a credit under this | ||
subchapter; | ||
(3) the geographical distribution of the qualified | ||
capital investments on which tax credit claims are made under this | ||
subchapter; and | ||
(4) the effect of the credit provided under this | ||
subchapter on employment, personal income, and capital investment | ||
in this state and on state tax revenues. | ||
(b) The final report issued before the expiration of this | ||
subchapter must include historical information on the credit | ||
authorized under this subchapter. | ||
(c) The comptroller may not include in the report | ||
information that is confidential by law. | ||
(d) For purposes of this section, the comptroller may | ||
require a taxable entity that claims a credit under this subchapter | ||
to submit information, on a form provided by the comptroller, on the | ||
location of the taxable entity's capital investment in this state | ||
and any other information necessary to complete the report required | ||
under this section. | ||
(e) The comptroller shall provide notice to the members of | ||
the legislature that the report required under this section is | ||
available on request. | ||
Sec. 171.830. COMPTROLLER POWERS AND DUTIES. The | ||
comptroller shall adopt rules and forms necessary to implement this | ||
subchapter. | ||
Sec. 171.831. EXPIRATION. (a) This subchapter expires | ||
December 31, 2025. | ||
(b) The expiration of this subchapter does not affect the | ||
carryforward of a credit under Section 171.826 or those credits for | ||
which a taxable entity is eligible before the date this subchapter | ||
expires. | ||
SECTION 19. Chapter 171, Tax Code, is amended by adding | ||
Subchapter S to read as follows: | ||
SUBCHAPTER S. TAX CREDIT FOR CERTIFIED REHABILITATION OF CERTIFIED | ||
HISTORIC STRUCTURES | ||
Sec. 171.901. DEFINITIONS. In this subchapter: | ||
(1) "Certified historic structure" means a property in | ||
this state that is: | ||
(A) listed individually in the National Register | ||
of Historic Places; | ||
(B) designated as a Recorded Texas Historic | ||
Landmark under Section 442.006, Government Code, or as a state | ||
archeological landmark under Chapter 191, Natural Resources Code; | ||
or | ||
(C) certified by the commission as contributing | ||
to the historic significance of: | ||
(i) a historic district listed in the | ||
National Register of Historic Places; or | ||
(ii) a local district certified by the | ||
United States Department of the Interior in accordance with 36 | ||
C.F.R. Section 67.9. | ||
(2) "Certified rehabilitation" means the | ||
rehabilitation of a certified historic structure that the | ||
commission has certified as meeting the United States secretary of | ||
the interior's Standards for Rehabilitation as defined in 36 C.F.R. | ||
Section 67.7. | ||
(3) "Commission" means the Texas Historical | ||
Commission. | ||
(4) "Eligible costs and expenses" means qualified | ||
rehabilitation expenditures as defined by Section 47(c)(2), | ||
Internal Revenue Code. | ||
Sec. 171.902. ELIGIBILITY FOR CREDIT. An entity is | ||
eligible to apply for a credit in the amount and under the | ||
conditions and limitations provided by this subchapter against the | ||
tax imposed under this chapter. | ||
Sec. 171.903. QUALIFICATION. An entity is eligible for a | ||
credit for eligible costs and expenses incurred in the certified | ||
rehabilitation of a certified historic structure as provided by | ||
this subchapter if: | ||
(1) the rehabilitated certified historic structure is | ||
placed in service on or after September 1, 2013; | ||
(2) the entity has an ownership interest in the | ||
certified historic structure in the year during which the structure | ||
is placed in service after the rehabilitation; and | ||
(3) the total amount of the eligible costs and | ||
expenses incurred exceeds $5,000. | ||
Sec. 171.904. CERTIFICATION OF ELIGIBILITY. (a) Before | ||
claiming, selling, or assigning a credit under this subchapter, the | ||
entity that incurred the eligible costs and expenses in the | ||
rehabilitation of a certified historic structure must request from | ||
the commission a certificate of eligibility on which the commission | ||
certifies that the work performed meets the definition of a | ||
certified rehabilitation. The entity must include with the | ||
entity's request: | ||
(1) information on the property that is sufficient for | ||
the commission to determine whether the property meets the | ||
definition of a certified historic structure; and | ||
(2) information on the rehabilitation, and | ||
photographs before and after work is performed, sufficient for the | ||
commission to determine whether the rehabilitation meets the United | ||
States secretary of the interior's Standards for Rehabilitation as | ||
defined in 36 C.F.R. Section 67.7. | ||
(b) The commission shall issue a certificate of eligibility | ||
to an entity that has incurred eligible costs and expenses as | ||
provided by this subchapter. The certificate must: | ||
(1) confirm that: | ||
(A) the property to which the eligible costs and | ||
expenses relate is a certified historic structure; and | ||
(B) the rehabilitation qualifies as a certified | ||
rehabilitation; and | ||
(2) specify the date the certified historic structure | ||
was first placed in service after the rehabilitation. | ||
(c) The entity must forward the certificate of eligibility | ||
and the following documentation to the comptroller to claim the tax | ||
credit: | ||
(1) an audited cost report issued by a certified | ||
public accountant, as defined by Section 901.002, Occupations Code, | ||
that itemizes the eligible costs and expenses incurred in the | ||
certified rehabilitation of the certified historic structure by the | ||
entity; | ||
(2) the date the certified historic structure was | ||
first placed in service after the rehabilitation and evidence of | ||
that placement in service; and | ||
(3) an attestation of the total eligible costs and | ||
expenses incurred by the entity on the rehabilitation of the | ||
certified historic structure. | ||
(d) For purposes of approving the tax credit under | ||
Subsection (c), the comptroller may rely on the audited cost report | ||
provided by the entity that requested the tax credit. | ||
(e) An entity that sells or assigns a credit under this | ||
subchapter to another entity shall provide a copy of the | ||
certificate of eligibility, together with the audited cost report, | ||
to the purchaser or assignee. | ||
Sec. 171.905. AMOUNT OF CREDIT; LIMITATIONS. (a) The total | ||
amount of the credit under this subchapter with respect to the | ||
rehabilitation of a single certified historic structure that may be | ||
claimed may not exceed 25 percent of the total eligible costs and | ||
expenses incurred in the certified rehabilitation of the certified | ||
historic structure. | ||
(b) The total credit claimed for a report, including the | ||
amount of any carryforward under Section 171.906, may not exceed | ||
the amount of franchise tax due for the report after any other | ||
applicable tax credits. | ||
(c) Eligible costs and expenses may only be counted once in | ||
determining the amount of the tax credit available, and more than | ||
one entity may not claim a credit for the same eligible costs and | ||
expenses. | ||
Sec. 171.906. CARRYFORWARD. (a) If an entity is eligible | ||
for a credit that exceeds the limitation under Section 171.905(b), | ||
the entity 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 171.905(b). | ||
Sec. 171.907. APPLICATION FOR CREDIT. (a) An entity must | ||
apply for a credit under this subchapter on or with the report for | ||
the period for which the credit is claimed. | ||
(b) An entity shall file with any report on which the credit | ||
is claimed a copy of the certificate of eligibility issued by the | ||
commission under Section 171.904 and any other information required | ||
by the comptroller to sufficiently demonstrate that the entity is | ||
eligible for the credit. | ||
(c) The burden of establishing eligibility for and the value | ||
of the credit is on the entity. | ||
Sec. 171.908. SALE OR ASSIGNMENT OF CREDIT. (a) An entity | ||
that incurs eligible costs and expenses may sell or assign all or | ||
part of the credit that may be claimed for those costs and expenses | ||
to one or more entities, and any entity to which all or part of the | ||
credit is sold or assigned may sell or assign all or part of the | ||
credit to another entity. There is no limit on the total number of | ||
transactions for the sale or assignment of all or part of the total | ||
credit authorized under this subchapter, however, collectively all | ||
transfers are subject to the maximum total limits provided by | ||
Section 171.905. | ||
(b) An entity that sells or assigns a credit under this | ||
section and the entity to which the credit is sold or assigned shall | ||
jointly submit written notice of the sale or assignment to the | ||
comptroller on a form promulgated by the comptroller not later than | ||
the 30th day after the date of the sale or assignment. The notice | ||
must include: | ||
(1) the date of the sale or assignment; | ||
(2) the amount of the credit sold or assigned; | ||
(3) the names and federal tax identification numbers | ||
of the entity that sold or assigned the credit or part of the credit | ||
and the entity to which the credit or part of the credit was sold or | ||
assigned; and | ||
(4) the amount of the credit owned by the selling or | ||
assigning entity before the sale or assignment, and the amount the | ||
selling or assigning entity retained, if any, after the sale or | ||
assignment. | ||
(c) The sale or assignment of a credit in accordance with | ||
this section does not extend the period for which a credit may be | ||
carried forward and does not increase the total amount of the credit | ||
that may be claimed. After an entity claims a credit for eligible | ||
costs and expenses, another entity may not use the same costs and | ||
expenses as the basis for claiming a credit. | ||
(d) Notwithstanding the requirements of this subchapter, a | ||
credit earned or purchased by, or assigned to, a partnership, | ||
limited liability company, S corporation, or other pass-through | ||
entity may be allocated to the partners, members, or shareholders | ||
of that entity and claimed under this subchapter in accordance with | ||
the provisions of any agreement among the partners, members, or | ||
shareholders and without regard to the ownership interest of the | ||
partners, members, or shareholders in the rehabilitated certified | ||
historic structure, provided that the entity that claims the credit | ||
must be subject to the tax imposed under this chapter. | ||
Sec. 171.909. RULES. The commission and the comptroller | ||
shall adopt rules necessary to implement this subchapter. | ||
SECTION 20. (a) Chapter 325, Government Code, is amended by | ||
adding Section 325.025 to read as follows: | ||
Sec. 325.025. EVALUATION OF EXEMPTIONS FROM FRANCHISE TAX. | ||
(a) The commission shall periodically evaluate each exemption | ||
provided by Chapter 171, Tax Code, from the tax imposed under that | ||
chapter to consider whether retaining the exemption is in the | ||
public's best interest. | ||
(b) At each regular legislative session, the commission | ||
shall present to the governor and the legislature a report on the | ||
evaluation and recommendations it makes under Subsection (a). | ||
(c) The commission shall conduct the evaluation required by | ||
Subsection (a) according to a schedule that the commission adopts. | ||
The schedule must provide for the commission to evaluate each tax | ||
exemption at an interval not to exceed six years. The commission | ||
shall provide the schedule to the governor and the legislature. | ||
(d) The evaluation described by this section does not apply | ||
to a tax exemption that is: | ||
(1) explicitly provided by the constitution of this | ||
state; or | ||
(2) related to an item or service that this state is | ||
unable to tax under the United States Constitution or federal law. | ||
(b) The Sunset Advisory Commission shall adopt a schedule | ||
for evaluating exemptions from the tax imposed under Chapter 171, | ||
Tax Code, as provided by Section 325.025, Government Code, as added | ||
by this section, on or before January 1, 2014. | ||
SECTION 21. Sections 171.0021, 171.1016(d), and 171.103(c) | ||
and (d), Tax Code, are repealed. | ||
SECTION 22. (a) Section 18, Chapter 1 (H.B. 3), Acts of the | ||
79th Legislature, 3rd Called Session, 2006, is amended by adding | ||
Subsections (h) and (i) to read as follows: | ||
(h) In this subsection and Subsection (i) of this section, | ||
"transfer" includes a sale. Notwithstanding Subsections (e) and | ||
(f) of this section, a corporation that has unused, unexpired | ||
credits carried forward under former Subchapter P or Q, Chapter | ||
171, Tax Code, may transfer the credits to another taxpayer of this | ||
state. To be eligible to transfer the credits, the corporation must | ||
obtain a certificate of transfer of credit from the comptroller of | ||
public accounts for the amount of the credits to be transferred. | ||
Not later than the 30th day after the date of the transfer, the | ||
corporation must submit to the comptroller a notice of the transfer | ||
in a form prescribed by the comptroller. The notice must be | ||
accompanied by a copy of the certificate of transfer issued by the | ||
comptroller and specify: | ||
(1) the number on the certificate of transfer; | ||
(2) the amount of the corporation's unused, unexpired | ||
credits preceding the transfer; | ||
(3) the date of the transfer; | ||
(4) the amount of credits transferred; | ||
(5) the tax identification numbers of the corporation | ||
and the taxpayer to which the credits were transferred; | ||
(6) the corporation's remaining amount of unused, | ||
unexpired credits after the transfer; and | ||
(7) any other information the comptroller requires. | ||
(i) The transfer of a credit under Subsection (h) of this | ||
section is limited to a credit that was first reported on a report | ||
originally due before January 1, 2008, and does not include credits | ||
authorized under former Subchapter Q-1, Chapter 171, Tax Code, or | ||
credits that were created under the terms of a written agreement | ||
between a taxpayer and the Texas Department of Economic Development | ||
or its successor that was entered into before June 1, 2006, and | ||
which credits continue to accrue under the terms provided by | ||
Section 19 of this Act. The transferee of a credit under this | ||
section obtains the credit subject to the same rights and | ||
privileges as the transferor. The transfer of a credit under | ||
Subsection (h) of this section does not extend or lessen the period | ||
during which the credit may be claimed. If a corporation transfers a | ||
credit that the corporation was not entitled to claim at the time of | ||
the transfer: | ||
(1) the taxpayer to which the credit was transferred | ||
may pursue any remedy authorized by law against the corporation and | ||
may not pursue any remedy against the comptroller of public | ||
accounts or this state; and | ||
(2) the comptroller: | ||
(A) may not allow the taxpayer to which the | ||
credit was transferred to apply the credit on a report; or | ||
(B) shall recover from the taxpayer the amount of | ||
the credit the taxpayer claims on a report using any means | ||
authorized by law. | ||
(b) This section applies only to a credit transferred on or | ||
after the effective date of this section. | ||
(c) This section takes effect September 1, 2013. | ||
SECTION 23. Section 1(c), Chapter 286 (H.B. 4765), Acts of | ||
the 81st Legislature, Regular Session, 2009, as amended by Section | ||
37.01, Chapter 4 (S.B. 1), Acts of the 82nd Legislature, 1st Called | ||
Session, 2011, is repealed. | ||
SECTION 24. Section 2, Chapter 286 (H.B. 4765), Acts of the | ||
81st Legislature, Regular Session, 2009, as amended by Section | ||
37.02, Chapter 4 (S.B. 1), Acts of the 82nd Legislature, 1st Called | ||
Session, 2011, and which amended former Subsection (d), Section | ||
171.002, Tax Code, is repealed. | ||
SECTION 25. Section 3, Chapter 286 (H.B. 4765), Acts of the | ||
81st Legislature, Regular Session, 2009, as amended by Section | ||
37.03, Chapter 4 (S.B. 1), Acts of the 82nd Legislature, 1st Called | ||
Session, 2011, and which amended former Subsection (a), Section | ||
171.0021, Tax Code, is repealed. | ||
SECTION 26. This Act applies only to a report originally due | ||
on or after the effective date of this Act. | ||
SECTION 27. Section 171.1011(y), Tax Code, as added by this | ||
Act, takes effect January 1, 2016. | ||
SECTION 28. Section 14 of this Act takes effect January 1, | ||
2015. | ||
SECTION 29. Section 171.1011(n), Tax Code, is amended to | ||
read as follows: | ||
(n) A [ |
||
entity that is a health care provider shall exclude from its total | ||
revenue: | ||
(1) to the extent included under Subsection (c)(1)(A), | ||
(c)(2)(A), or (c)(3), the total amount of payments the health care | ||
provider received: | ||
(A) under the Medicaid program, Medicare | ||
program, Indigent Health Care and Treatment Act (Chapter 61, Health | ||
and Safety Code), and Children's Health Insurance Program (CHIP); | ||
(B) for professional services provided in | ||
relation to a workers' compensation claim under Title 5, Labor | ||
Code; and | ||
(C) for professional services provided to a | ||
beneficiary rendered under the TRICARE military health system; and | ||
(2) the actual cost to the health care provider for any | ||
uncompensated care provided, but only if the provider maintains | ||
records of the uncompensated care for auditing purposes and, if the | ||
provider later receives payment for all or part of that care, the | ||
provider adjusts the amount excluded for the tax year in which the | ||
payment is received. | ||
SECTION 30. Section 171.1011(o), Tax Code, is repealed. | ||
SECTION 31. This Act applies only to a report originally due | ||
on or after the effective date of this Act. | ||
SECTION 32. This Act takes effect January 1, 2015. | ||
SECTION 33. Except as otherwise provided by this Act, this | ||
Act takes effect January 1, 2014. |