Bill Text: TX SB410 | 2019-2020 | 86th Legislature | Introduced

Texas Senate Bill 410 (Prior Session Legislation)

Introduced

Bill Title: Relating to a franchise tax credit for ad valorem taxes paid by a taxable entity on certain inventory.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2019-02-14 - Referred to Finance [SB410 Detail]

Download: Texas-2019-SB410-Introduced.html

	86R482 CJC-D

	By: Hughes	S.B. No. 410



	A BILL TO BE ENTITLED
	AN ACT
	relating to a franchise tax credit for ad valorem taxes paid by a
	taxable entity on certain inventory.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Chapter 171, Tax Code, is amended by adding
	Subchapter N to read as follows:
	SUBCHAPTER N. TAX CREDIT FOR BUSINESS AD VALOREM TAX PAYMENTS ON
	INVENTORY
	Sec. 171.701. DEFINITIONS. In this subchapter:
	(1) "Qualified entity" means a taxable entity that
	pays ad valorem taxes on qualified inventory owned by the entity and
	located in this state.
	(2) "Qualified inventory" means tangible personal
	property held for sale at retail other than:
	(A) a dealer's motor vehicle inventory as defined
	by Section 23.121;
	(B) a dealer's heavy equipment inventory as
	defined by Section 23.1241;
	(C) a dealer's vessel and outboard motor
	inventory as defined by Section 23.124; and
	(D) retail manufactured housing inventory as
	defined by Section 23.127.
	Sec. 171.702. ELIGIBILITY FOR CREDIT. A qualified entity
	is eligible to apply for a credit in the amount and under the
	conditions and limitations provided by this subchapter against the
	tax imposed under this chapter.
	Sec. 171.703. AMOUNT OF CREDIT; LIMITATIONS. (a) The total
	amount of the credit under this subchapter is equal to the amount of
	the ad valorem taxes paid by the qualified entity during the period
	on which a report is based that are derived from the taxable value
	of qualified inventory owned by the entity and located in this
	state.
	(b) The total credit claimed for a report, including the
	amount of any carryforward under Section 171.704, may not exceed
	the amount of franchise tax due for the report after any other
	applicable tax credits.
	Sec. 171.704. CARRYFORWARD. (a) If a qualified entity is
	eligible for a credit that exceeds the limitation under Section
	171.703(b), the entity may carry the unused credit forward for not
	more than three consecutive reports.
	(b) A carryforward is considered the remaining portion of a
	credit that cannot be claimed in the current year because of the
	limitation under Section 171.703(b). A carryforward is added to
	the next year's installment of the credit in determining the
	limitation for that year. A credit carryforward from a previous
	report is considered to be used before the current year
	installment.
	Sec. 171.705. APPLICATION FOR CREDIT. (a) A qualified
	entity must apply for a credit under this subchapter on or with the
	report for the period for which the credit is claimed.
	(b) A qualified entity shall file with a report on which the
	credit is claimed any information required by the comptroller to
	sufficiently demonstrate that the entity is eligible for the
	credit.
	(c) The burden of establishing eligibility for and the value
	of the credit is on the qualified entity.
	Sec. 171.706. SALE OR ASSIGNMENT OF CREDIT. (a) A
	qualified entity that earns a credit under this subchapter may sell
	or assign all or part of the credit, and any entity to which all or
	part of the credit is sold or assigned may sell or assign all or part
	of the credit to another entity. There is no limit on the total
	number of transactions for the sale or assignment of all or part of
	the total credit authorized under this subchapter, however,
	collectively all transferred and retained credits claimed for a
	period are subject to the maximum total limitations provided by
	Section 171.703.
	(b) An entity that sells or assigns a credit under this
	section and the entity to which the credit is sold or assigned shall
	jointly submit written notice of the sale or assignment to the
	comptroller on a form promulgated by the comptroller not later than
	the 30th day after the date of the sale or assignment. The notice
	must include:
	(1) the date of the sale or assignment;
	(2) the amount of the credit sold or assigned;
	(3) the names and federal tax identification numbers
	of the entity that sold or assigned the credit or part of the credit
	and the entity to which the credit or part of the credit was sold or
	assigned; and
	(4) the amount of the credit owned by the selling or
	assigning entity before the sale or assignment, and the amount the
	selling or assigning entity retained, if any, after the sale or
	assignment.
	(c) The sale or assignment of a credit in accordance with
	this section does not extend the period for which a credit may be
	carried forward and does not increase the total amount of the credit
	that may be claimed.
	Sec. 171.707. RULES. The comptroller shall adopt rules
	necessary to implement this subchapter.
	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.