Bill Text: TX HB414 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to a franchise tax credit for certain research and development activities.
Sponsorship: Slight Partisan Bill (Republican 4-2)
Status: (Introduced - Dead) 2013-03-18 - Left pending in committee [HB414 Detail]
Download: Texas-2013-HB414-Introduced.html
| 83R2240 KLA-D | ||
| By: Button | H.B. No. 414 | |
|
|
||
|
|
||
| relating to a franchise tax credit for certain research and | ||
| development activities. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Chapter 171, Tax Code, is amended by adding | ||
| Subchapter M to read as follows: | ||
| SUBCHAPTER M. TAX CREDIT FOR CERTAIN RESEARCH AND DEVELOPMENT | ||
| ACTIVITIES | ||
| Sec. 171.651. DEFINITIONS. In this subchapter: | ||
| (1) "Qualified research" has the meaning assigned by | ||
| Section 41, Internal Revenue Code, except that the research must be | ||
| conducted in this state. | ||
| (2) "Qualified research expense" has the meaning | ||
| assigned by Section 41, Internal Revenue Code, except that the | ||
| payments and expenses must be for research conducted in this state. | ||
| Sec. 171.652. ENTITLEMENT TO CREDIT. A taxable entity 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. | ||
| Sec. 171.653. AMOUNT OF CREDIT. (a) The credit for any | ||
| report equals: | ||
| (1) 10 percent of the difference between: | ||
| (A) the qualified research expenses incurred in | ||
| this state during the period on which the report is based; and | ||
| (B) 50 percent of the average amount of qualified | ||
| research expenses incurred in this state during the three tax years | ||
| preceding the period on which the report is based; or | ||
| (2) the amount of taxes imposed by Chapter 151 and paid | ||
| during the period on which the report is based on the sale, lease, | ||
| or rental to or use by the taxable entity of a taxable item that is | ||
| used in performing qualified research. | ||
| (b) For each report, a taxable entity may elect to compute | ||
| the amount of the credit in accordance with Subsection (a)(1) or | ||
| (2), regardless of whether the taxable entity has made a different | ||
| election on a previous report. | ||
| (c) The burden of establishing entitlement to and the value | ||
| of the credit is on the taxable entity. | ||
| Sec. 171.654. LIMITATIONS. The total credit claimed under | ||
| this subchapter for a report, including the amount of any | ||
| carryforward credit under Section 171.655, may not exceed 50 | ||
| percent of the amount of franchise tax due for the report before any | ||
| other applicable tax credits. | ||
| Sec. 171.655. CARRYFORWARD. If a taxable entity is | ||
| eligible for a credit that exceeds the limitation under Section | ||
| 171.654, the taxable entity may carry the unused credit forward for | ||
| not more than 20 consecutive reports. A credit carryforward from a | ||
| previous report is considered to be used before the current year | ||
| credit. | ||
| Sec. 171.656. 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. 171.657. APPLICATION FOR CREDIT. A taxable entity | ||
| must apply for a credit under this subchapter on or with the tax | ||
| report for the period for which the credit is claimed. | ||
| Sec. 171.658. RULES. The comptroller shall adopt rules | ||
| necessary to implement this subchapter, including rules regarding | ||
| the documentation necessary to establish the amount of the credit | ||
| computed under Section 171.653(a)(2). | ||
| SECTION 2. This Act applies only to a report originally due | ||
| on or after the effective date of this Act. | ||
| SECTION 3. This Act takes effect January 1, 2014. | ||
