Bill Text: TX HB381 | 2013-2014 | 83rd Legislature | Introduced

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Bill Title: Relating to the imposition of a personal income tax on income that exceeds $250,000 to provide property tax relief and fund public education; providing penalties.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2013-02-11 - Referred to Ways & Means [HB381 Detail]

Download: Texas-2013-HB381-Introduced.html

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83R1706 ADM-D
By: Burnam H.B. No. 381

A BILL TO BE ENTITLED
AN ACT
relating to the imposition of a personal income tax on income that
exceeds $250,000 to provide property tax relief and fund public
education; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 2, Tax Code, is amended by adding Subtitle
L to read as follows:
SUBTITLE L. PERSONAL INCOME TAX
CHAPTER 261. PERSONAL INCOME TAX
SUBCHAPTER A. IMPOSITION OF TAX
Sec. 261.001. TAX IMPOSED. (a) A tax is imposed for each
tax year:
(1) on the taxable income that exceeds $250,000 of
every resident of this state; and
(2) on the taxable income that exceeds $250,000
derived from sources in this state of every nonresident.
(b) The tax rates for an individual are:
(1) for taxable income that exceeds $250,000 but does
not exceed $500,000, four percent of the taxable income that
exceeds $250,000 but does not exceed $500,000;
(2) for taxable income that exceeds $500,000 but does
not exceed $1 million, $10,000 plus five percent of the taxable
income that exceeds $500,000 but does not exceed $1 million; or
(3) for taxable income that exceeds $1 million,
$35,000 plus six percent of the taxable income that exceeds $1
million.
Sec. 261.002. JOINT RETURN. If persons subject to the tax
under this chapter file a joint federal income tax return, they may
file a joint return under this chapter but they may not combine
their incomes, deductions, exemptions, or credits for the purpose
of determining the amount of tax owed. The separate incomes of each
joint filer are taxed as individual incomes under Section 261.001.
Sec. 261.003. MEANING OF TERMS. (a) In this chapter:
(1) an individual is a resident of this state if the
individual:
(A) is domiciled in this state, unless the
individual does not maintain a permanent abode in this state and
does maintain a permanent abode elsewhere and spends, in the
aggregate, not more than 30 days of the tax year in this state; or
(B) is not domiciled in this state but maintains
a permanent abode in this state and spends, in the aggregate, more
than 183 days of the tax year in this state; and
(2) an individual is a nonresident if the individual
is not a resident of this state.
(b) Any term used in this chapter and not defined by or for
purposes of this chapter has the same meaning as when used in a
comparable context in the laws of the United States relating to
federal income taxes, unless a different meaning is clearly
required. Any reference in this chapter to federal law means the
provisions of the Internal Revenue Code of 1986 and other
provisions of federal laws relating to federal income taxes.
[Sections 261.004-261.050 reserved for expansion]
SUBCHAPTER B. COMPUTATION OF TAXABLE INCOME
Sec. 261.051. TAXABLE INCOME. The taxable income of a
resident of this state is the resident's federal adjusted gross
income as defined by federal law.
Sec. 261.052. CREDIT FOR INCOME TAX PAID TO ANOTHER STATE.
(a) A resident individual is allowed a credit against the tax
otherwise due under this chapter for the amount of any income tax
imposed on the individual for the tax year by another state of the
United States on income that is derived from sources in that state
and that is subject to tax under this chapter.
(b) The credit provided by this section may not exceed an
amount equal to the tax otherwise due under this chapter multiplied
by a fraction, the numerator of which is the taxpayer's adjusted
gross income derived from sources in the other taxing jurisdiction
as modified by this subchapter and the denominator of which is the
taxpayer's entire adjusted gross income as modified by this
subchapter.
Sec. 261.053. DUAL RESIDENCE; REDUCTION OF TAX. If a
taxpayer is a resident of this state and is regarded as a resident
of another jurisdiction for purposes of personal income taxation,
the comptroller shall reduce the tax on that portion of the
taxpayer's income that is subject to tax in both jurisdictions
solely by virtue of dual residence. The reduction is an amount
equal to the lower of the two taxes applicable to the income taxed
twice multiplied by a fraction, the numerator of which is the tax
imposed by this state on the income taxed twice and the denominator
of which is the combined taxes of the two jurisdictions on the
income taxed twice.
Sec. 261.054. NONRESIDENT INDIVIDUALS--TAXABLE INCOME.
The taxable income of a nonresident individual is that part of the
individual's federal adjusted gross income derived from sources in
this state determined under Section 261.055.
Sec. 261.055. ADJUSTED GROSS INCOME FROM SOURCES IN THIS
STATE--NONRESIDENT. (a) The adjusted gross income of a
nonresident derived from sources in this state is the net amount of
items of income, gain, loss, and deduction entering into the
nonresident's federal adjusted gross income that are derived from
or connected with sources in this state, including:
(1) the nonresident's distributive share of
partnership income and deductions determined under Section
261.403; and
(2) the nonresident's share of estate or trust income
and deductions derived from sources in this state.
(b) Items of income, gain, loss, and deduction derived from
or connected with sources in this state are those items
attributable to:
(1) the ownership or disposition of an interest in
real or tangible personal property in this state; and
(2) a business, trade, profession, or occupation
conducted in this state.
(c) Income from intangible personal property, including
annuities, dividends, interest, and gains from the disposition of
intangible personal property, constitutes income derived from
sources in this state only to the extent that the income is from
property used in a business, trade, profession, or occupation
carried on in this state.
(d) Deductions for capital losses, net long-term capital
gains, and net operating losses derived from or connected with
sources in this state are determined in the same manner as the
corresponding federal deductions. However, the extent to which the
deductions are derived from or connected with sources in this state
is determined under the comptroller's rules.
(e) For a nonresident individual who is a shareholder of a
corporation that is an electing small business corporation for
federal income tax purposes, the undistributed taxable income of
the corporation does not constitute income derived from sources in
this state and a net operating loss of the corporation does not
constitute a loss or deduction connected with sources in this
state.
(f) If a business, trade, profession, or occupation is
carried on partly in and partly outside this state, the items of
income and deduction derived from or connected with sources in this
state are determined by apportionment and allocation consistent
with Chapter 141 under the comptroller's rules.
(g) Compensation paid by the United States for service in
the armed forces of the United States performed by a nonresident is
not income derived from sources in this state.
[Sections 261.056-261.100 reserved for expansion]
SUBCHAPTER C. [RESERVED]
[Sections 261.101-261.200 reserved for expansion]
SUBCHAPTER D. ACCOUNTING PERIODS AND METHODS
Sec. 261.201. PERIOD FOR COMPUTATION OF TAXABLE INCOME.
(a) For purposes of the tax imposed by this chapter, a taxpayer's
tax year is the same as the taxpayer's tax year for federal income
tax purposes.
(b) If a taxpayer's tax year is changed for federal income
tax purposes, the taxpayer's tax year for purposes of the tax
imposed by this chapter is similarly changed.
Sec. 261.202. METHODS OF ACCOUNTING. (a) A taxpayer's
method of accounting is the same as the taxpayer's method of
accounting for federal income tax purposes. If a single method of
accounting has not been regularly used by the taxpayer, taxable
income for purposes of this chapter shall be computed under any
method that in the opinion of the comptroller fairly reflects
income.
(b) If a taxpayer's method of accounting is changed for
federal income tax purposes, the taxpayer's method of accounting
for purposes of this chapter is changed in the same manner.
Sec. 261.203. ADJUSTMENTS. In computing a taxpayer's
taxable income for any tax year under a method of accounting
different from the method under which the taxpayer's taxable income
for the previous year was computed, there shall be taken into
account those adjustments that are determined, under rules
prescribed by the comptroller, to be necessary solely by reason of
the change in order to prevent amounts from being duplicated or
omitted.
Sec. 261.204. LIMITATION ON ADDITIONAL TAX. (a) If a
taxpayer's method of accounting is changed, other than from an
accrual to an installment method, an additional tax that results
from adjustments determined to be necessary solely because of the
change may not be greater than if those adjustments were ratably
allocated and included for the tax year of the change and not more
than two preceding tax years during which the taxpayer used the
method of accounting from which the change is made.
(b) If a taxpayer's method of accounting is changed from an
accrual to an installment method, an additional tax for the year of
the change of method and for a subsequent year that is attributable
to the receipt of installment payments properly accrued in a prior
year is reduced by the portion of tax for any prior tax year
attributable to the accrual of the installment payments, under
rules adopted by the comptroller.
[Sections 261.205-261.400 reserved for expansion]
SUBCHAPTER E. PARTNERS AND PARTNERSHIPS
Sec. 261.401. ENTITY NOT TAXABLE. A partnership as an
entity is not subject to the tax imposed by this chapter. Persons
carrying on business as partners are liable for the tax imposed by
this chapter only in their separate or individual capacities.
Sec. 261.402. RESIDENT PARTNER--ADJUSTED GROSS INCOME. (a)
Partnership income, gain, loss, or deduction is allocated in
accordance with each partner's distributive share for federal
income tax purposes.
(b) Each item of partnership income, gain, loss, or
deduction has the same character for a partner under this chapter as
it has for federal income tax purposes. If an item is not
characterized for federal income tax purposes, it has the same
character for a partner as if the partner realized the item directly
from the source from which the partnership realized the item or the
partner incurred the item in the same manner as the partnership
incurred the item.
(c) If a partner's distributive share of an item of
partnership income, gain, loss, or deduction is determined for
federal income tax purposes by a special provision in the
partnership agreement with respect to the item, and the principal
purpose of the provision is the avoidance or evasion of tax under
this chapter, the partner's distributive share of the item for
purposes of the tax under this chapter is determined in accordance
with the method of determining the partner's distributive share of
the taxable income or loss of the partnership generally, excluding
those items requiring separate computation under Section 702,
Internal Revenue Code of 1986.
Sec. 261.403. NONRESIDENT PARTNER--ADJUSTED GROSS INCOME
FROM SOURCES IN THIS STATE. (a) In determining the adjusted gross
income of a nonresident partner of any partnership, there shall be
included only that part derived from or connected with sources in
this state of the partner's distributive share of items of
partnership income, gain, loss, and deduction entering into the
partner's federal adjusted gross income, as that part is determined
under rules adopted by the comptroller consistent with the rules
adopted under Section 261.055.
(b) Except as authorized by Subsection (c), in determining
the sources of a nonresident partner's income, no effect is given to
a provision in the partnership agreement that:
(1) characterizes payments to the partner as being for
services or for the use of capital;
(2) allocates to the partner, as income or gain from
sources outside this state, a greater proportion of the partner's
distributive share of partnership income or gain than the ratio of
partnership income or gain from sources outside this state to
partnership income or gain from all sources; or
(3) allocates to the partner a greater proportion of a
partnership item of loss or deduction connected with sources in
this state than the partner's proportionate share, for federal
income tax purposes, of partnership loss or deduction generally.
(c) The comptroller may, on application, authorize the use
of other appropriate and equitable methods of determining a
nonresident partner's portion of partnership items derived from or
connected with sources in this state on terms the comptroller may
require.
(d) A nonresident partner's distributive share of items of
income, gain, loss, or deduction is determined under Section
261.402(a). The character of partnership items for a nonresident
partner is determined under Section 261.402(b). The effect of a
special provision in a partnership agreement, other than a
provision described by Subsection (b), having as a principal
purpose the avoidance or evasion of tax under this chapter is
determined under Section 261.402(c).
[Sections 261.404-261.500 reserved for expansion]
SUBCHAPTER F. TAX RETURNS AND PAYMENTS
Sec. 261.501. PERSONS REQUIRED TO MAKE RETURNS OF INCOME.
An individual who has adjusted gross income from sources in this
state in excess of $250,000 shall file a state income tax return.
Sec. 261.502. RETURNS BY FIDUCIARIES. (a) The executor,
administrator, or other person charged with the care of a
decedent's property shall file a state income tax return for the
decedent if the decedent had adjusted gross income from sources in
this state in excess of $250,000. A decedent's final return is due
when it would have been due if the decedent had not died.
(b) An individual's authorized agent, guardian, conservator
or fiduciary or another person charged with the care of the
individual or the individual's property, other than a receiver in
possession of only a part of the individual's property, shall file a
state income tax return for an individual who is unable to make a
return because of minority or other disability if the individual
has adjusted gross income from sources in this state in excess of
$250,000.
(c) If two or more fiduciaries are acting jointly, any one
of them may file the return.
Sec. 261.503. NOTICE OF QUALIFICATION AS RECEIVER. A
receiver, trustee in bankruptcy, assignee for benefit of creditors,
or other similar fiduciary shall give notice of the person's
qualification to the comptroller, as may be required by rule.
Sec. 261.504. CHANGE OF STATUS AS RESIDENT OR NONRESIDENT
DURING YEAR. (a) If the status of an individual changes during the
individual's tax year from resident to nonresident or from
nonresident to resident, the comptroller by rule may require the
individual to file one return for the portion of the year during
which the individual is a resident and one for the portion of the
year during which the individual is a nonresident.
(b) Except as provided by Subsection (c), the taxable income
of an individual is determined as provided by Section 261.051 for
residents and Section 261.054 for nonresidents as if the
individual's tax year for federal income tax purposes were limited
to the period of the individual's resident and nonresident status
respectively.
(c) If an individual's residency status changes during a tax
year, the individual shall include in taxable income for the period
before the change an item of income, gain, loss, or deduction that:
(1) was accrued by the individual before the change;
and
(2) would otherwise be includable or allowed after the
change.
(d) If two returns are required to be filed under this
section, the total of the taxes due may not be less than would be due
if the total of the taxable incomes reported on the two returns were
includable in one return.
Sec. 261.505. TIME AND PLACE FOR FILING RETURNS AND PAYING
TAX. (a) A person required to make and file an income tax return
required by this chapter shall:
(1) file the return not later than the 15th day of the
fourth month following the end of the taxpayer's tax year; and
(2) pay a tax due to the comptroller not later than the
last day the filing of the return is allowed without penalty,
excluding an extension of time for filing the return.
(b) The comptroller by rule shall prescribe the place for
filing a return, statement, or other document required by this
chapter and for the payment of a tax.
Sec. 261.506. ESTIMATED TAX. (a) An individual subject to
the income tax imposed by this chapter shall make estimated
payments of the tax. Section 6654, Internal Revenue Code of 1986,
other than Subsections (a), (b), (d)(2), and (e) of that section,
governing the payment of estimated federal income taxes on
individuals applies to the payments required by this section,
including exemptions from the estimated tax payment requirement.
For purposes of this section, a reference in Section 6654, Internal
Revenue Code of 1986, to:
(1) the federal income tax imposed on an individual
means the tax imposed by this chapter; and
(2) a power or duty given to the United States
secretary of the treasury means a power or duty assigned to the
comptroller.
(b) The comptroller shall adopt rules to administer this
section.
(c) Payment of the estimated tax or an installment is
considered payment on account of the tax imposed by this chapter.
Sec. 261.507. EXTENSION OF TIME FOR FILING AND PAYMENT. (a)
The comptroller, on terms the comptroller may require, may grant a
reasonable extension of time for payment of tax or an installment,
or for filing a return, statement, or other document required under
this chapter. Except for an extension for a taxpayer who is outside
the United States, an extension for filing a return, statement, or
document may not exceed six months.
(b) If the time for the payment of an amount of tax is
extended, the comptroller may require the taxpayer to furnish a
bond or other security in an amount that does not exceed twice the
amount of tax for which the extension of time for payment is
granted, on terms the comptroller may require.
Sec. 261.508. CHANGE OF ELECTION. An election expressly
authorized by this chapter may be changed as authorized by the
comptroller or by comptroller rule.
Sec. 261.509. SIGNING OF RETURNS AND OTHER DOCUMENTS. (a)
A return, statement, or other document required to be made or filed
under this chapter must be signed as provided by the comptroller.
An individual's name signed to a return, statement, or other
document is prima facie evidence that the individual signed the
return, statement, or other document.
(b) A return, statement, or other document required of a
partnership must be signed by at least one partner. A partner's
name signed to a return, statement, or other document is prima facie
evidence that the partner is authorized to sign on behalf of the
partnership.
(c) The making or filing of a return, statement, or other
document or copy required to be made or filed under this chapter,
including a copy of a federal income tax return, constitutes a
certification by the person making or filing the return, statement,
or other document or copy that the statements contained in it are
true and that a copy filed is a true copy.
[Sections 261.510-261.520 reserved for expansion]
SUBCHAPTER G. INFORMATION RETURNS
Sec. 261.521. GENERAL REQUIREMENTS. The comptroller by
rule may require the keeping of records, the content and form of
returns and statements, and the filing of copies of federal income
tax returns and determinations. The comptroller may require a
person, by rule or by notice served on the person, to make returns,
provide statements, or keep records, as the comptroller considers
sufficient to show whether the person is liable under this chapter
for tax or for the collection of tax.
Sec. 261.522. REPORT OF CHANGE IN FEDERAL TAXABLE INCOME.
(a) If the amount of a taxpayer's federal taxable income reported
on the taxpayer's federal income tax return for a tax year is
changed or corrected by the United States Internal Revenue Service
or other competent authority, or as the result of a renegotiation of
a contract or subcontract with the United States, the taxpayer
shall:
(1) report the change or correction in federal taxable
income not later than the 90th day after the final determination of
the change, correction, or renegotiation, or as required by the
comptroller; and
(2) concede the accuracy of the determination or state
in what way it is erroneous.
(b) A taxpayer filing an amended federal income tax return
shall also file, not later than the 90th day after filing the
federal return, an amended return under this chapter, and shall
give any information required by the comptroller.
(c) The comptroller by rule may prescribe exceptions to the
requirements of this section.
[Sections 261.523-261.600 reserved for expansion]
SUBCHAPTER H. ADDITIONS TO TAX; PENALTIES
Sec. 261.601. FAILURE TO FILE TAX RETURN. (a) A person who
does not file a return required under this chapter on or before the
prescribed date is subject to the following penalty based on a
percentage of the full amount of tax owed on the prescribed day:
(1) if the return is filed not later than the 30th day
after the prescribed date, five percent;
(2) if the return is filed later than the 30th day
after the prescribed date, but not later than the 60th day after the
prescribed date, 10 percent;
(3) if the return is filed later than the 60th day
after the prescribed date, but not later than the 90th day after the
prescribed date, 15 percent;
(4) if the return is filed later than the 90th day
after the prescribed date, but not later than the 120th day after
the prescribed date, 20 percent; or
(5) if the return is filed later than the 120th day
after the prescribed date, 25 percent.
(b) The prescribed date is determined with regard to an
extension of time for filing.
(c) In determining the amount owed on the prescribed date,
the taxpayer is entitled to credit for a portion of the tax paid on
or before the prescribed date and other credit that may be claimed
on the return.
(d) The penalty required by this section does not apply if
the taxpayer shows that the failure to file a return was not the
result of wilful neglect before the prescribed date or at any time
during the delinquency and that good cause for the failure existed
at all times before filing.
Sec. 261.602. FAILURE TO PAY TAX. (a) A person who does not
pay any amount of tax owed by the person on the prescribed date
shall pay, in addition to all other penalties and interest, a
penalty of 10 percent of the amount of the tax due on the prescribed
date.
(b) The prescribed date is determined with regard to
extensions of time allowed by the comptroller.
(c) A failure to pay all or part of an estimated tax is
considered to be an underpayment of estimated tax. The comptroller
by rule shall prescribe the method of determining the amount and
period of underpayment.
Sec. 261.603. PENALTIES AND INTEREST TREATED AS TAX. The
taxpayer shall pay penalties and interest provided by this
subchapter on receiving notice and demand. The comptroller shall
assess and collect and the taxpayer shall pay penalties and
interest in the same manner as other taxes. The comptroller may
issue a deficiency notice for all or part of a penalty or interest
along with or separate from the amount of tax owed in the absence of
penalties or interest.
[Sections 261.604-261.630 reserved for expansion]
SUBCHAPTER I. CREDITS AND REFUNDS
Sec. 261.631. CREDITS AND REFUNDS. (a) Within the
applicable period of limitations, the comptroller may credit an
overpayment of income tax and interest on the overpayment against a
tax liability to this state of the person who made the overpayment.
The comptroller shall refund the balance out of the proceeds of the
tax retained by the comptroller.
(b) The comptroller may prescribe rules that allow the
comptroller to credit against the estimated tax for a tax year the
amount determined to be an overpayment of the income tax for a
preceding tax year.
(c) If an amount of income tax is assessed and collected
after the expiration of the period of limitations, the amount
collected is an overpayment.
Sec. 261.632. ABATEMENTS. (a) The comptroller may abate
any unpaid portion of a tax or a tax liability that is excessive in
amount, that is assessed after the expiration of the applicable
period of limitations, or that is erroneously or illegally
assessed.
(b) The comptroller may abate the unpaid portion of a tax or
a tax liability if the comptroller determines under rules
prescribed by the comptroller that the administration and
collection costs involved would not warrant collection of the
amount due.
Sec. 261.633. EXTENDED LIMITATION PERIOD. (a) If a
taxpayer is required by Section 261.522 to report a change or
correction in federal taxable income reported on a federal income
tax return, to report a change or correction that is treated in the
same manner as if it were an overpayment for federal income tax
purposes, or to file an amended return with the comptroller, a claim
for credit or refund of a resulting overpayment of tax must be filed
by the taxpayer not later than the second anniversary of the date
the notice of the change or correction or the amended return was
required to be filed with the comptroller. If the report or amended
return required by Section 261.522 is not filed within the period
prescribed by that section, interest on a resulting refund or
credit does not accrue after the period. The amount of credit or
refund may not exceed the amount of the reduction in tax
attributable to the federal change, correction, or amendment to
items on the taxpayer's amended federal income tax return. This
subsection does not affect the time within which or the amount for
which a claim for credit or refund may be filed under a provision
other than this section.
(b) A taxpayer may file a claim for credit or refund, under
rules adopted by the comptroller, not later than the seventh
anniversary of the due date of the return for the period with
respect to which the claim is made if the claim relates to an
overpayment of tax resulting from:
(1) the deduction of:
(A) a debt that became worthless; or
(B) a loss from the worthlessness of a security;
or
(2) the effect that a deduction described by
Subdivision (1) has on the application to the taxpayer of a
carryover.
(c) If a claim for credit or refund relates to an
overpayment attributable to a net operating loss carryback, the
claim may be made, under rules adopted by the comptroller, not later
than the 15th day of the 40th month following the end of the tax year
of the net operating loss that resulted in the carryback or the
period prescribed by Section 111.104, whichever expires later.
[Sections 261.634-261.650 reserved for expansion]
SUBCHAPTER J. MISCELLANEOUS ENFORCEMENT PROVISIONS
Sec. 261.651. TAXPAYER NOT RESIDENT. If notice and demand
for the payment of a tax is given to a nonresident and it appears to
the comptroller that it is not practicable to locate property of the
taxpayer sufficient in amount to cover the amount of tax due, the
comptroller may authorize the institution of any available action
or proceeding to collect or enforce the claim in any place by any
procedure by which a civil judgment of a court of record of this
state could be collected or enforced. The comptroller may
designate agents or retain counsel outside this state for the
purpose of collecting taxes due under this chapter and require of
them bonds or other security for the faithful performance of their
duties. The comptroller may enter into agreements with the tax
department of another state for the collection of taxes from
persons found in this state who are delinquent in the payment of
income taxes imposed by that state on the condition that the other
state provides similar assistance in the collection of taxes from
persons found in that state who are delinquent in the payment of
taxes imposed by this chapter.
Sec. 261.652. INCOME TAX CLAIMS OF OTHER STATES. The courts
of this state shall recognize and enforce liabilities for personal
income taxes lawfully imposed by another state if that state
recognizes and enforces liabilities under this chapter, and the
authorized officer of the other state may sue for the collection of
personal income tax in the courts of this state. A certificate by
the secretary of state of the other state that an officer suing for
the collection of the tax is authorized to collect the tax is
conclusive proof of the officer's authority. In this section,
"taxes" includes additions to tax, interest, and penalties.
Sec. 261.653. ORDER TO COMPEL COMPLIANCE. (a) On
application of the attorney general, a judge of a court that has
personal jurisdiction over a taxpayer or other person who
intentionally or knowingly refuses to file a tax return required by
this chapter may, by order, direct the person to file the return. A
person who fails or refuses to obey the order is guilty of contempt
of court.
(b) If any person intentionally or knowingly refuses to make
available any books, papers, records, or memoranda for examination
by the comptroller or wilfully refuses to attend and testify, in
accordance with the powers conferred on the comptroller by Chapter
111, on application of the comptroller, a judge of a court that has
personal jurisdiction over the person may by order direct the
person to comply with the comptroller's request for books, papers,
records, or memoranda or for the person's attendance and testimony.
If the books, papers, records, or memoranda required by the
comptroller are in the custody of a corporation, the order of the
court may be directed to any principal officer of the corporation.
A person who fails or refuses to obey the order is guilty of
contempt of court.
Sec. 261.654. TRANSFEREES. (a) In this section,
"transferee" includes an heir or a recipient of a donation, legacy,
devise, or distribution.
(b) If a transferee of a taxpayer's property is liable at
law or in equity for any tax, addition to tax, penalty, or interest
owed by the taxpayer under this chapter, the provisions and
limitations of this chapter apply to the transferee as if the
transferee were the taxpayer except as otherwise provided by this
section.
(c) The comptroller may not assess tax liability against a
transferee of a taxpayer's property after:
(1) the first anniversary of the expiration of the
period of limitation against the taxpayer if the transferee is the
initial transferee;
(2) the first anniversary of the expiration of the
period of limitation against the preceding transferee, but not
later than the third anniversary of the expiration of the period of
limitation for assessment against the taxpayer, if the transferee
is not the initial transferee; or
(3) notwithstanding Subdivisions (1) and (2), if
before the expiration of the period of limitation under Subdivision
(1) or (2) a proceeding for the collection of the liability has been
initiated against the taxpayer or the last preceding transferee,
the first anniversary of the date on which the proceeding is
terminated.
(d) If, before the expiration of the period of limitation
applicable to a transferee, the comptroller and the transferee
consent in writing to an assessment after that time, the liability
may be assessed at any time before the expiration of the agreed
period. The period of limitation on credit or refund to the
transferee of overpayments of tax made by the transferee or by the
taxpayer to which the transferee is legally entitled is extended by
an agreement under this subsection and any extension of the
agreement.
(e) If a person dies, the period of limitation for
assessment against that person is the period that would be in effect
had death not occurred.
Sec. 261.655. JEOPARDY DETERMINATIONS. (a) If the
comptroller issues a jeopardy determination for a tax for a current
period, the comptroller shall terminate the tax period of the
taxpayer immediately, and the notice and demand for a return and
immediate payment of the tax shall apply to the terminated period
and to income accrued and deductions incurred on or before the
termination date if not otherwise properly includable or deductible
for the period.
(b) The comptroller may abate the jeopardy determination if
the comptroller finds that jeopardy does not exist.
Sec. 261.656. BANKRUPTCY OR RECEIVERSHIP. (a) The
comptroller may immediately assess any deficiency determined by the
comptroller, together with additions to tax and interest provided
by law, on the adjudication of bankruptcy of any taxpayer in any
bankruptcy proceeding or the appointment of a receiver for any
taxpayer in any receivership proceeding before any court of the
United States or any state or territory.
(b) The comptroller may present a claim for a deficiency,
addition to tax, or interest to the court before which a bankruptcy
or receivership proceeding is pending regardless of whether the
taxpayer is contesting the deficiency, addition to tax, or interest
under Chapter 111 or 112. A taxpayer may not contest a proposed
assessment under Chapter 111 after the taxpayer is adjudged
bankrupt or a receiver is appointed for the taxpayer.
Sec. 261.657. EVIDENCE OF RELATED FEDERAL DETERMINATION.
Evidence of a federal determination relevant to the taxes imposed
by this chapter is admissible in an administrative or judicial
proceeding relating to those taxes.
[Sections 261.658-261.670 reserved for expansion]
SUBCHAPTER K. OFFENSES
Sec. 261.671. ATTEMPT TO EVADE OR DEFEAT TAX. (a) A person
commits an offense if the person intentionally or knowingly
attempts in any manner to evade or defeat a tax imposed by this
chapter or the payment of tax imposed by this chapter.
(b) An offense under this section is a felony of the third
degree.
Sec. 261.672. FAILURE TO PAY. (a) A person commits an
offense if the person is required under this chapter to pay a tax
imposed by this chapter and the person intentionally or knowingly
fails to pay the tax.
(b) An offense under this section is a felony of the third
degree.
Sec. 261.673. FAILURE TO FILE RETURN, KEEP RECORDS, SUPPLY
INFORMATION, OR PAY TAX. (a) A person commits an offense if the
person is required under this chapter to pay a tax, or required by
this chapter or rule adopted under this chapter to make a return, to
keep records, or to supply information, and the person
intentionally or knowingly fails to pay the tax, make the return,
keep the records, or supply the information at the time or times
required by law.
(b) An offense under this section is a Class A misdemeanor.
[Sections 261.674-261.680 reserved for expansion]
SUBCHAPTER L. POWERS OF COMPTROLLER
Sec. 261.681. COOPERATION WITH OTHER JURISDICTIONS. The
comptroller may permit the United States secretary of the treasury
or the secretary's delegate, or the proper officer of any state or
other jurisdiction imposing an income tax on the incomes of
individuals, or the authorized representative of either officer, to
inspect the income tax returns of an individual, or may furnish to
the officer or authorized representative an abstract of the return
of income of an individual or supply the officer with information
concerning an item of income contained in a return, or disclosed by
the report of an investigation of the income or return of income of
an individual, but permission may be granted only if the statutes of
the United States or of the other jurisdiction, as applicable,
grant substantially similar privileges to the comptroller.
Sec. 261.682. COOPERATION WITH OTHER TAX OFFICIALS OF THIS
STATE. The comptroller may permit other tax officials of this state
to inspect tax returns and reports filed under this chapter but the
inspection is permitted only for purposes of enforcing a tax law and
only to the extent and under the conditions prescribed by rule of
the comptroller.
Sec. 261.683. CONTRACT WITH SECRETARY OF TREASURY FOR
COLLECTION OF TAX. The comptroller may enter into an agreement with
the United States secretary of the treasury or the secretary's
delegate under which, to the extent provided by the terms of the
agreement, the secretary or delegate will administer, enforce, and
collect a tax imposed by this chapter on behalf of this state. The
cost of the services performed by the secretary or delegate in
administering, enforcing, or collecting the tax under the terms of
the agreement may be paid from the appropriations for the general
operations of the comptroller.
Sec. 261.684. ARMED FORCES RELIEF PROVISIONS. (a) The
period of service in the armed forces of the United States in a
combat zone plus a period of continuous hospitalization outside
this state attributable to that service plus the next 180 days is
disregarded in determining, under rules of the comptroller, whether
an act required by this chapter was performed by a taxpayer or the
taxpayer's representative within the time prescribed.
(b) If an individual dies during an induction period while
in active service as a member of the armed forces of the United
States and the death occurred while the individual was serving in a
combat zone or as a result of wounds, disease, or injury incurred
while serving, the tax imposed by this chapter does not apply to the
tax year in which the individual dies or to any prior tax year
ending on or after the first day the individual served in a combat
zone.
Sec. 261.685. DISPOSITION OF PROCEEDS. The revenue from
the tax imposed by this chapter shall be deposited as follows:
(1) two-thirds of the revenue shall be deposited to
the credit of a special account in the general revenue fund and may
be appropriated only for the purpose of reducing the rate of ad
valorem maintenance and operations taxes levied for the support of
primary and secondary education in the manner provided by Sections
24(h) and (i), Article VIII, Texas Constitution, for the reduction
of that rate; and
(2) one-third to the credit of the foundation school
fund.
SECTION 2. Section 111.201, Tax Code, is amended to read as
follows:
Sec. 111.201. ASSESSMENT LIMITATION. (a) No tax imposed by
this title may be assessed after four years from the date that the
tax becomes due and payable except as provided by Subsection (b).
(b) Except as otherwise provided by Chapter 261, a tax
imposed by that chapter may not be assessed after six years from the
date the tax becomes due and payable.
SECTION 3. A referendum as required by Section 24, Article
VIII, Texas Constitution, on the adoption of the income tax under
this Act shall be submitted to the voters at an election to be held
November 5, 2013. The ballot for the referendum shall be printed to
permit voting for or against the proposition: "The adoption of a
personal income tax at graduated rates of four percent to six
percent for taxable income in excess of $250,000."
SECTION 4. (a) Except as provided by Subsection (b) of this
section, this Act applies to income earned, accrued, or received on
or after the effective date of this Act.
(b) Income, deductions, losses, credits against income, or
other adjustments allowed in determining the amount of tax under
this Act or the amount of federal adjusted gross income under this
Act, including carryovers, are not prohibited in computing the
taxes for a tax period beginning on January 1, 2014, because those
adjustments may have accrued or otherwise originated before the
effective date of this Act.
(c) In 2014, the comptroller by rule may suspend the
application of Section 261.506, Tax Code, as added by this Act,
wholly or partly and may extend the deadlines for estimated tax
payments under that section.
SECTION 5. (a) Except as provided by Section 6 of this Act,
if the proposition in Section 3 of this Act is approved, this Act
takes effect January 1, 2014.
(b) Except as provided by Section 6 of this Act, if the
proposition in Section 3 of this Act is not approved, this Act has
no effect.
SECTION 6. Section 3 of this Act takes effect September 1,
2013.