Bill Text: TX HB28 | 2017-2018 | 85th Legislature | Engrossed


Bill Title: Relating to the use of certain surplus state revenue, in certain circumstances, to adjust franchise tax rates to phase out the franchise tax and to the expiration of that tax.

Spectrum: Moderate Partisan Bill (Republican 27-3)

Status: (Engrossed - Dead) 2017-05-22 - Co-sponsor authorized [HB28 Detail]

Download: Texas-2017-HB28-Engrossed.html
  85R23415 E
 
  By: Bonnen of Brazoria, et al. H.B. No. 28
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the use of certain surplus state revenue, in certain
  circumstances, to adjust franchise tax rates to phase out the
  franchise tax and to the expiration of that tax.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 171.002(a) and (b), Tax Code, are
  amended to read as follows:
         (a)  Subject to Sections 171.003, 171.004, and 171.1016 and
  except as provided by Subsection (b), the rate of the franchise tax
  is 0.75 percent of taxable margin.
         (b)  Subject to Sections 171.003, 171.004, and 171.1016, the
  rate of the franchise tax is 0.375 percent of taxable margin for
  those taxable entities primarily engaged in retail or wholesale
  trade.
         SECTION 2.  Subchapter A, Chapter 171, Tax Code, is amended
  by adding Section 171.004 to read as follows:
         Sec. 171.004.  ADJUSTMENT OF TAX RATES. (a) As soon as
  practical after September 1, but before December 15, of each
  odd-numbered year, the comptroller shall determine:
               (1)  the ending balance of general revenue related
  funds available for certification for the preceding state fiscal
  biennium; and
               (2)  the tax rates for purposes of Sections 171.002(a)
  and (b) and Section 171.1016 that, if applied beginning January 1 of
  the next year, are estimated to yield an amount of revenue for the
  state fiscal biennium in which the determination is made equal to
  the lesser of:
                     (A)  the ending balance determined under
  Subdivision (1); or
                     (B)  $3.5 billion.
         (b)  Not later than December 15 of each odd-numbered year,
  the comptroller shall: 
               (1)  determine the adjusted tax rates, which are the
  tax rates under Sections 171.002(a) and (b) and Section 171.1016 in
  effect on the date the comptroller makes the determination under
  Subsection (a)(2) less the tax rates determined under Subsection
  (a)(2); and
               (2)  except as provided by Subsection (e): 
                     (A)  adopt the adjusted tax rates determined under
  Subdivision (1);
                     (B)  publish notice of the adjusted tax rates in
  the Texas Register; and
                     (C)  provide any other notice relating to the
  adjusted tax rates that the comptroller considers appropriate. 
         (c)  In determining the tax rates under Subsection (a)(2) and
  the adjusted tax rates under Subsection (b)(1), the comptroller
  shall ensure that the adjusted tax rates reflect proportional
  reductions to the tax rates in effect under Sections 171.002(a) and
  (b) and Section 171.1016 at the time the determinations are made.
         (d)  The adjusted tax rates adopted under Subsection (b):
               (1)  apply to a report originally due on or after
  January 1 of the even-numbered year following the date the rates are
  adopted; and
               (2)  are considered for purposes of this chapter to be
  the rates provided by and imposed under Section 171.002 or
  171.1016, as applicable.
         (e)  In the state fiscal year in which the adjusted tax rates
  determined under Subsection (b)(1) are less than 15 percent of the
  tax rates under Sections 171.002(a) and (b) and Section 171.1016 in
  effect on September 1, 2017:
               (1)  this chapter expires on December 31 of that year;
  and
               (2)  not later than December 15 of that year the
  comptroller shall:
                     (A)  publish notice in the Texas Register that an
  entity previously subject to the tax imposed under this chapter is
  not required to file or pay the tax in connection with a report that
  would otherwise be originally due on or after January 1 of the next
  year; and
                     (B)  provide any other notice relating to the
  expiration of the tax that the comptroller considers appropriate.
         (f)  An action taken by the comptroller under this section is
  final and may not be appealed.
         (g)  The comptroller shall adopt rules to implement this
  section.
         SECTION 3.  Sections 171.1016(b) and (e), Tax Code, are
  amended to read as follows:
         (b)  The amount of the tax for which a taxable entity that
  elects to pay the tax as provided by this section is liable is
  computed by:
               (1)  determining the taxable entity's total revenue
  from its entire business, as determined under Section 171.1011;
               (2)  apportioning the amount computed under
  Subdivision (1) to this state, as provided by Section 171.106, to
  determine the taxable entity's apportioned total revenue; and
               (3)  multiplying the amount computed under Subdivision
  (2) by the rate of 0.331 percent or, if applicable, an adjusted tax
  rate determined under Section 171.004.
         (e)  A reference in this chapter or other law to the rate of
  the franchise tax means, as appropriate:
               (1)  [,] the rate under Section 171.002 or, for a
  taxable entity that elects to pay the tax as provided by this
  section, the rate under this section; or
               (2)  the adjusted rates under Section 171.004.
         SECTION 4.  Chapter 171, Tax Code, is amended by adding
  Subchapter Z to read as follows:
  SUBCHAPTER Z. EXPIRATION
         Sec. 171.9321.  EXPIRATION. This chapter expires on the
  date provided by Section 171.004(e)(1).
         SECTION 5.  (a) After Chapter 171, Tax Code, expires as
  provided by Subchapter Z, Chapter 171, Tax Code, as added by this
  Act:
               (1)  the provisions of former Chapter 171 and the
  provisions of Subtitle B, Title 2, Tax Code, continue to apply to
  audits, deficiencies, redeterminations, and refunds of any tax due
  or collected under former Chapter 171 until barred by limitations;
  and
               (2)  former Sections 171.206 through 171.210, Tax Code,
  continue to apply to information described by those sections.
         (b)  The expiration of Chapter 171, Tax Code, does not
  affect:
               (1)  the status of a taxable entity that has had its
  corporate privileges, certificate of authority, certificate of
  organization, certificate of limited partnership, corporate
  charter, or registration revoked, a suit filed against it, or a
  receiver appointed under former Subchapter F, G, or H of that
  chapter;
               (2)  the ability of the comptroller of public accounts,
  secretary of state, or attorney general to take action against a
  taxable entity under former Subchapter F, G, or H of that chapter
  for actions that took place before the chapter expired; or
               (3)  the right of a taxable entity to contest a
  forfeiture, revocation, lawsuit, or appointment of a receiver under
  former Subchapter F, G, or H of that chapter.
         SECTION 6.  This Act applies only to a report originally due
  on or after January 1, 2020.
         SECTION 7.  This Act takes effect September 1, 2019.
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