Bill Text: TX SB138 | 2015-2016 | 84th Legislature | Introduced


Bill Title: Relating to the phaseout and repeal of the franchise tax; lowering the rates of the tax.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-03-04 - Left pending in committee [SB138 Detail]

Download: Texas-2015-SB138-Introduced.html
  84R197 TJB-D
 
  By: Perry S.B. No. 138
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the phaseout and repeal of the franchise tax; lowering
  the rates of the tax.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  (a) Effective January 1, 2016, Sections
  171.002(a) and (b), Tax Code, are amended to read as follows:
         (a)  Subject to Sections 171.003 and 171.1016 and except as
  provided by Subsection (b), the rate of the franchise tax is 0.75
  [one] percent of taxable margin.
         (b)  Subject to Sections 171.003 and 171.1016, the rate of
  the franchise tax is 0.38 [0.5] percent of taxable margin for those
  taxable entities primarily engaged in retail or wholesale trade.
         (b)  This section applies only to a report originally due on
  or after January 1, 2016.
         SECTION 2.  (a) Effective January 1, 2017, Sections
  171.002(a) and (b), Tax Code, are amended to read as follows:
         (a)  Subject to Sections 171.003 and 171.1016 and except as
  provided by Subsection (b), the rate of the franchise tax is 0.50
  [one] percent of taxable margin.
         (b)  Subject to Sections 171.003 and 171.1016, the rate of
  the franchise tax is 0.25 [0.5] percent of taxable margin for those
  taxable entities primarily engaged in retail or wholesale trade.
         (b)  This section applies only to a report originally due on
  or after January 1, 2017.
         SECTION 3.  (a) Effective January 1, 2018, Sections
  171.002(a) and (b), Tax Code, are amended to read as follows:
         (a)  Subject to Sections 171.003 and 171.1016 and except as
  provided by Subsection (b), the rate of the franchise tax is 0.25
  [one] percent of taxable margin.
         (b)  Subject to Sections 171.003 and 171.1016, the rate of
  the franchise tax is 0.13 [0.5] percent of taxable margin for those
  taxable entities primarily engaged in retail or wholesale trade.
         (b)  This section applies only to a report originally due on
  or after January 1, 2018.
         SECTION 4.  (a) Effective January 1, 2016, Section
  171.1016(b), Tax Code, is amended to read as follows:
         (b)  The amount of the tax for which a taxable entity that
  elects to pay the tax as provided by this section is liable is
  computed by:
               (1)  determining the taxable entity's total revenue
  from its entire business, as determined under Section 171.1011;
               (2)  apportioning the amount computed under
  Subdivision (1) to this state, as provided by Section 171.106, to
  determine the taxable entity's apportioned total revenue; and
               (3)  multiplying the amount computed under Subdivision
  (2) by the rate of 0.43 [0.575] percent.
         (b)  This section applies only to a report originally due on
  or after January 1, 2016.
         SECTION 5.  (a) Effective January 1, 2017, Section
  171.1016(b), Tax Code, is amended to read as follows:
         (b)  The amount of the tax for which a taxable entity that
  elects to pay the tax as provided by this section is liable is
  computed by:
               (1)  determining the taxable entity's total revenue
  from its entire business, as determined under Section 171.1011;
               (2)  apportioning the amount computed under
  Subdivision (1) to this state, as provided by Section 171.106, to
  determine the taxable entity's apportioned total revenue; and
               (3)  multiplying the amount computed under Subdivision
  (2) by the rate of 0.29 [0.575] percent.
         (b)  This section applies only to a report originally due on
  or after January 1, 2017.
         SECTION 6.  (a) Effective January 1, 2018, Section
  171.1016(b), Tax Code, is amended to read as follows:
         (b)  The amount of the tax for which a taxable entity that
  elects to pay the tax as provided by this section is liable is
  computed by:
               (1)  determining the taxable entity's total revenue
  from its entire business, as determined under Section 171.1011;
               (2)  apportioning the amount computed under
  Subdivision (1) to this state, as provided by Section 171.106, to
  determine the taxable entity's apportioned total revenue; and
               (3)  multiplying the amount computed under Subdivision
  (2) by the rate of 0.14 [0.575] percent.
         (b)  This section applies only to a report originally due on
  or after January 1, 2018.
         SECTION 7.  Section 171.362(f), Tax Code, is amended to read
  as follows:
         (f)  In addition to any other penalty authorized by this
  section, a taxable entity that owes a tax for a reporting period and
  [who] fails to file a report for the reporting period as required by
  this chapter shall pay a penalty of $50.  The penalty provided by
  this subsection is assessed without regard to whether the taxable
  entity subsequently files the report [or whether any taxes were due
  from the taxable entity for the reporting period under the required
  report].
         SECTION 8.  (a)  Chapter 171, Tax Code, is repealed.
         (b)  A taxable entity that is subject to the franchise tax
  imposed under Chapter 171, Tax Code, on December 31, 2018, shall
  file a final franchise tax return and pay a transitional tax as
  required by this subsection on or before May 15, 2019. The
  transitional tax is equal to the tax the taxable entity would have
  paid in 2019 under Chapter 171, Tax Code, if Chapter 171, Tax Code,
  had not been repealed.  The provisions of Chapter 171, Tax Code,
  relating to the computation and payment of the franchise tax remain
  in effect after the repeal of Chapter 171, Tax Code, by this section
  for the purposes of computing and paying the transitional tax
  required by this subsection.
         (c)  Chapter 171, Tax Code, and Subtitle B, Title 2, Tax
  Code, continue to apply to audits, deficiencies, redeterminations,
  and refunds of any tax due or collected under Chapter 171, including
  the tax due as provided by Subsection (b) of this section, until
  barred by limitations.
         (d)  The repeal of Chapter 171, Tax Code, does not affect:
               (1)  the status of a taxable entity that has had its
  corporate privileges, certificate of authority, certificate of
  organization, certificate of limited partnership, corporate
  charter, or registration revoked, suit filed against it, or a
  receiver appointed under Subchapter F, G, or H of that chapter;
               (2)  the ability of the comptroller, secretary of
  state, or attorney general to take action against a taxable entity
  under Subchapter F, G, or H of that chapter for actions that took
  place before the repeal; or
               (3)  the right of a taxable entity to contest a
  forfeiture, revocation, lawsuit, or appointment of a receiver under
  Subchapter F, G, or H of that chapter.
         (e)  This section takes effect January 1, 2019.
         SECTION 9.  Except as otherwise provided by this Act, this
  Act applies only to a report originally due on or after the
  effective date of this Act.
         SECTION 10.  Except as otherwise provided by this Act, this
  Act takes effect January 1, 2016.
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