Bill Text: TX HB1289 | 2013-2014 | 83rd Legislature | Engrossed

Texas House Bill 1289 (Prior Session Legislation)

Bill Title: Relating to the exclusion of certain service costs in determining a taxable entity's taxable margin for purposes of the franchise tax.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2013-05-13 - Referred to s/c on Fiscal Matters by Chair [HB1289 Detail]

Download: Texas-2013-HB1289-Engrossed.html



	By: Hilderbran	H.B. No. 1289



	A BILL TO BE ENTITLED
	AN ACT
	relating to the exclusion of certain service costs in determining a
	taxable entity's taxable margin for purposes of the franchise tax.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 171.1011, Tax Code, is amended by adding
	Subsection (v) to read as follows:
	(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.
	SECTION 2. Section 171.1012, Tax Code, is amended by adding
	Subsections (k-2) and (k-3) to read as follows:
	(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.
	SECTION 3. This Act applies only to a report originally due
	on or after the effective date of this Act.
	SECTION 4. This Act takes effect January 1, 2014.