Bill Text: TX SB1031 | 2017-2018 | 85th Legislature | Comm Sub
Bill Title: Relating to a deduction under the franchise tax for certain contracts with the federal government.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2017-05-08 - Not again placed on intent calendar [SB1031 Detail]
Download: Texas-2017-SB1031-Comm_Sub.html
| By: Taylor of Galveston, Menéndez | S.B. No. 1031 | |
| (In the Senate - Filed February 22, 2017; March 6, 2017, | ||
| read first time and referred to Committee on Finance; May 3, 2017, | ||
| reported adversely, with favorable Committee Substitute by the | ||
| following vote: Yeas 10, Nays 4; May 3, 2017, sent to printer.) | ||
| COMMITTEE SUBSTITUTE FOR S.B. No. 1031 | By: Taylor of Galveston | |
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| relating to a deduction under the franchise tax for certain | ||
| contracts with the federal government. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 171.101(a), Tax Code, is amended to read | ||
| as follows: | ||
| (a) The taxable margin of a taxable entity is computed by: | ||
| (1) determining the taxable entity's margin, which is | ||
| the lesser of: | ||
| (A) the amount provided by this paragraph, which | ||
| is the lesser of: | ||
| (i) 70 percent of the taxable entity's total | ||
| revenue from its entire business, as determined under Section | ||
| 171.1011; or | ||
| (ii) an amount equal to the taxable entity's | ||
| total revenue from its entire business as determined under Section | ||
| 171.1011 minus $1 million; or | ||
| (B) an amount computed by determining the taxable | ||
| entity's total revenue from its entire business under Section | ||
| 171.1011 and subtracting the greater of: | ||
| (i) $1 million; or | ||
| (ii) an amount equal to the sum of: | ||
| (a) at the election of the taxable | ||
| entity, either: | ||
| (1) cost of goods sold, as | ||
| determined under Section 171.1012; or | ||
| (2) compensation, as determined | ||
| under Section 171.1013; [ |
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| (b) any compensation, as determined | ||
| under Section 171.1013, paid to an individual during the period the | ||
| individual is serving on active duty as a member of the armed forces | ||
| of the United States if the individual is a resident of this state | ||
| at the time the individual is ordered to active duty and the cost of | ||
| training a replacement for the individual; and | ||
| (c) any costs not already subtracted | ||
| under Sub-subparagraph (a) that are properly allowable under the | ||
| Federal Acquisition Regulation (48 C.F.R. Chapter 1), or a | ||
| successor regulation, for contracts, or subcontracts supporting | ||
| those contracts, for the sale of goods or services to the federal | ||
| government by a taxable entity that is a party to at least one | ||
| contract subject to the requirements of 48 C.F.R. Chapter 2; | ||
| (2) apportioning the taxable entity's margin to this | ||
| state as provided by Section 171.106 to determine the taxable | ||
| entity's apportioned margin; and | ||
| (3) subtracting from the amount computed under | ||
| Subdivision (2) any other allowable deductions to determine the | ||
| taxable entity's taxable margin. | ||
| 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, 2020. | ||
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