Bill Text: TX HB803 | 2017-2018 | 85th Legislature | Introduced

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Bill Title: Relating to a temporary exemption from the sales and use tax and the franchise tax for certain businesses engaged in space flight activities.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2017-02-21 - Referred to Ways & Means [HB803 Detail]

Download: Texas-2017-HB803-Introduced.html

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85R2154 CJC-D
By: Dale H.B. No. 803

A BILL TO BE ENTITLED
AN ACT
relating to a temporary exemption from the sales and use tax and the
franchise tax for certain businesses engaged in space flight
activities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.362 to read as follows:
Sec. 151.362. TAXABLE ITEMS USED BY BUSINESSES ENGAGED IN
SPACE FLIGHT ACTIVITIES; TEMPORARY EXEMPTION. (a) In this
section:
(1) "Qualifying business entity" means a person who is
a business that is:
(A) primarily engaged in space flight
activities; and
(B) first located and begins doing business in
this state on or after January 1, 2018.
(2) "Space flight activities" has the meaning assigned
by Section 100A.001, Civil Practice and Remedies Code.
(b) The sale to or storage, use, or other consumption by a
qualifying business entity of a taxable item that will be directly
used or consumed by the entity is exempted from the taxes imposed by
this chapter.
(c) To claim an exemption under this section, a registration
number issued by the comptroller must be stated on the exemption
certificate provided by the purchaser of the item.
(d) Subject to Subsection (e), a person may apply to the
comptroller for issuance of a registration number by the
comptroller. The application must be made on a form prescribed by
the comptroller and include the information required by the
comptroller to establish that the person is a qualifying business
entity.
(e) A person who meets the requirements of a qualifying
business entity must apply for a registration number not later than
the first anniversary of the date the person begins doing business
in this state. The comptroller shall deny an application received
after that date.
(f) A registration number issued under this section expires
on the 10th anniversary of the date of issuance, unless revoked at
an earlier time by the comptroller as provided by Subsection (g).
The registration number may not be renewed.
(g) The comptroller shall revoke and may not reinstate a
registration number issued to a person if the person ceases to meet
the requirements of a qualifying business entity. A person whose
registration number is revoked is liable for payment of the taxes
imposed under this chapter on the sales price of each taxable item
for which the person claimed an exemption under this section on or
after the date the registration number was revoked.
(h) The comptroller shall adopt rules necessary to
implement this section, including rules relating to the:
(1) qualification of a person for an exemption under
this section;
(2) issuance and revocation of a registration number
issued under this section; and
(3) reporting and other procedures necessary to ensure
that a person to whom a registration number is issued under this
section complies with this section and remains entitled to the
exemption authorized by this section.
SECTION 2. Section 171.0001(4), Tax Code, as effective
until January 1, 2020, is amended to read as follows:
(4) "Beginning date" means:
(A) except as provided by Paragraph (B) or (C):
(i) for a taxable entity chartered or
organized in this state, the date on which the taxable entity's
charter or organization takes effect; and
(ii) for any other taxable entity, the date
on which the taxable entity begins doing business in this state;
[or]
(B) for a taxable entity that qualifies as a new
veteran-owned business as defined by Section 171.0005, the earlier
of:
(i) the fifth anniversary of the date on
which the taxable entity begins doing business in this state; or
(ii) the date the taxable entity ceases to
qualify as a new veteran-owned business as defined by Section
171.0005; or
(C) for a taxable entity that meets the
requirements of a qualifying business entity under Section 151.362,
the earlier of:
(i) the 10th anniversary of the date on
which the taxable entity begins doing business in this state; or
(ii) the date the taxable entity ceases to
comply with the requirements of a qualifying business entity under
that section.
SECTION 3. Section 171.0001(4), Tax Code, as effective
January 1, 2020, is amended to read as follows:
(4) "Beginning date" means:
(A) except as provided by Paragraph (B):
(i) for a taxable entity chartered or
organized in this state, the date on which the taxable entity's
charter or organization takes effect; and
(ii) [(B)] for any other taxable entity,
the date on which the taxable entity begins doing business in this
state; or
(B) for a taxable entity that meets the
requirements of a qualifying business entity under Section 151.362,
the earlier of:
(i) the 10th anniversary of the date on
which the taxable entity begins doing business in this state; or
(ii) the date the taxable entity ceases to
comply with the requirements of a qualifying business entity under
that section.
SECTION 4. Section 171.001, Tax Code, is amended by adding
Subsection (e) to read as follows:
(e) Notwithstanding Subsection (a), the tax imposed under
this chapter is not imposed on a taxable entity that meets the
requirements of a qualifying business entity under Section 151.362
until the earlier of:
(1) the 10th anniversary of the date on which the
taxable entity begins doing business in this state; or
(2) the date the taxable entity ceases to comply with
the requirements of a qualifying business entity under that
section.
SECTION 5. Section 171.063(g), Tax Code, as effective until
January 1, 2020, is amended to read as follows:
(g) If a corporation's federal tax exemption is withdrawn by
the Internal Revenue Service for failure of the corporation to
qualify or maintain its qualification for the exemption, the
corporation's exemption under this section ends on the effective
date of that withdrawal by the Internal Revenue Service. The
effective date of the withdrawal is considered the corporation's
beginning date for purposes of determining the corporation's
privilege periods and for all other purposes of this chapter,
except that if the corporation would have been subject to Section
171.001(d) or (e) in the absence of the federal tax exemption, and
the effective date of the withdrawal is a date earlier than the date
the corporation would have become subject to the franchise tax as
provided by Section 171.001(d) or (e), as applicable, the date the
corporation would have become subject to the franchise tax under
Section 171.001(d) or (e) [that section] is considered the
corporation's beginning date for those purposes.
SECTION 6. Section 171.063(g), Tax Code, as effective
January 1, 2020, is amended to read as follows:
(g) If a corporation's federal tax exemption is withdrawn by
the Internal Revenue Service for failure of the corporation to
qualify or maintain its qualification for the exemption, the
corporation's exemption under this section ends on the effective
date of that withdrawal by the Internal Revenue Service. The
effective date of the withdrawal is considered the corporation's
beginning date for purposes of determining the corporation's
privilege periods and for all other purposes of this chapter,
except that if the corporation would have been subject to Section
171.001(e) in the absence of the federal tax exemption, and the
effective date of the withdrawal is a date earlier than the date the
corporation would have become subject to the franchise tax as
provided by Section 171.001(e), the date the corporation would have
become subject to the franchise tax under that section is
considered the corporation's beginning date for those purposes.
SECTION 7. Section 171.204, Tax Code, is amended by adding
Subsection (e) to read as follows:
(e) The comptroller may require a taxable entity on which
the tax imposed under this chapter is not imposed solely because of
the application of Section 171.001(e) to file an information report
stating the taxable entity's beginning date as determined under
Section 171.0001 and any other information the comptroller
determines necessary. The comptroller may not require the taxable
entity to report or compute its margin.
SECTION 8. Not later than December 1, 2017, the comptroller
of public accounts shall adopt rules as required by Section
151.362(h), Tax Code, as added by this Act.
SECTION 9. Except as otherwise provided by this Act, this
Act takes effect September 1, 2017.