Bill Text: TX HB2942 | 2015-2016 | 84th Legislature | Introduced
Bill Title: Relating to passive entities for purposes of the franchise tax.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-03-16 - Referred to Ways & Means [HB2942 Detail]
Download: Texas-2015-HB2942-Introduced.html
84R13306 BEF-F | ||
By: Capriglione | H.B. No. 2942 |
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relating to passive entities for purposes of the franchise tax. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 171.0003(a), Tax Code, is amended to | ||
read as follows: | ||
(a) An entity is a passive entity only if: | ||
(1) the entity is a general or limited partnership or a | ||
trust, other than a business trust; and | ||
(2) during the period on which margin is based, the | ||
entity's federal gross income consists of at least 90 percent of the | ||
following income: | ||
(A) dividends, interest, foreign currency | ||
exchange gain, periodic and nonperiodic payments with respect to | ||
notional principal contracts, option premiums, cash settlement or | ||
termination payments with respect to a financial instrument, and | ||
income from a limited liability company; | ||
(B) distributive shares of partnership income to | ||
the extent that those distributive shares of income are greater | ||
than zero; | ||
(C) net capital gain [ |
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sale of real property, gains from the sale of commodities traded on | ||
a commodities exchange, and gains from the sale of securities; and | ||
(D) royalties, bonuses, or delay rental income | ||
from mineral properties and income from other nonoperating mineral | ||
interests[ |
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SECTION 2. Sections 171.0003(a-1) and 171.0004, Tax Code, | ||
are repealed. | ||
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, 2016. |