Bill Text: TX SB72 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to the decrease of the rates of the franchise tax under certain circumstances and the expiration of that tax.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-01-24 - Referred to Finance [SB72 Detail]
Download: Texas-2017-SB72-Introduced.html
85R2628 BEF-D | ||
By: Nelson | S.B. No. 72 |
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relating to the decrease of the rates of the franchise tax under | ||
certain circumstances and the expiration of that tax. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Sections 171.002(a) and (b), Tax Code, are | ||
amended to read as follows: | ||
(a) Subject to Sections 171.003, 171.004, and 171.1016 and | ||
except as provided by Subsection (b), the rate of the franchise tax | ||
is 0.75 percent of taxable margin. | ||
(b) Subject to Sections 171.003, 171.004, and 171.1016, the | ||
rate of the franchise tax is 0.375 percent of taxable margin for | ||
those taxable entities primarily engaged in retail or wholesale | ||
trade. | ||
SECTION 2. Subchapter A, Chapter 171, Tax Code, is amended | ||
by adding Section 171.004 to read as follows: | ||
Sec. 171.004. ADJUSTMENT OF TAX RATES. (a) In this section: | ||
(1) "Biennial revenue estimate" means the estimate of | ||
anticipated revenue to this state for the succeeding state fiscal | ||
biennium the comptroller prepares in accordance with Section | ||
49a(a), Article III, Texas Constitution. | ||
(2) "Current fiscal biennium" means the state fiscal | ||
biennium in which a determination date occurs. | ||
(3) "Determination date" means the first working day | ||
in a calendar year. | ||
(4) "Working day" has the meaning assigned by Section | ||
659.083, Government Code. | ||
(b) On the determination date each year, the comptroller | ||
shall: | ||
(1) estimate total probable revenue to this state for | ||
the current fiscal biennium: | ||
(A) using information available on the | ||
determination date; and | ||
(B) assuming the franchise tax rates in effect on | ||
December 31 of the previous year will be adjusted for the current | ||
year as provided by Subsection (c); | ||
(2) determine the amount of anticipated revenue stated | ||
in the biennial revenue estimate for the current fiscal biennium, | ||
as adjusted for estimates of revenue and disbursements associated | ||
with legislation enacted during the regular legislative session | ||
preceding the current fiscal biennium and any special sessions of | ||
that legislature, including any contingent appropriations | ||
certified before the determination date; and | ||
(3) if the amount estimated under Subdivision (1) is | ||
greater than or equal to the amount determined under Subdivision | ||
(2), certify that sufficient probable revenue is available for tax | ||
rate adjustments under Subsection (c). | ||
(c) Effective January 1 of each year in which the | ||
comptroller certifies under Subsection (b)(3) that sufficient | ||
probable revenue is available for tax rate adjustments for that | ||
year: | ||
(1) the rate of the franchise tax under Section | ||
171.002(a) is adjusted by subtracting 0.025 from the rate in effect | ||
on December 31 of the previous year; | ||
(2) the rate of the franchise tax under Section | ||
171.002(b) is adjusted by subtracting 0.0125 from the rate in | ||
effect on December 31 of the previous year; and | ||
(3) the rate of the franchise tax under Section | ||
171.1016(b)(3) is adjusted by subtracting 0.011 from the rate in | ||
effect on December 31 of the previous year. | ||
(d) The tax rates determined under Subsection (c): | ||
(1) apply to a report originally due on or after | ||
January 1 of the year the comptroller's certification under | ||
Subsection (b)(3) is made; and | ||
(2) are considered for purposes of this chapter to be | ||
the rates provided by and imposed under Section 171.002 or | ||
171.1016, as applicable. | ||
(e) If the comptroller does not make the certification under | ||
Subsection (b)(3), the rates of the franchise tax in effect on | ||
December 31 of the previous year remain in effect for the year in | ||
which the determination date occurs. | ||
(f) Notwithstanding Subsection (c), if an adjustment | ||
otherwise required by Subsection (c) would reduce a rate of the | ||
franchise tax to less than zero, the rate is instead reduced to | ||
zero. | ||
(g) Notwithstanding any other law, if the rates of the | ||
franchise tax under Section 171.002 are reduced to zero under | ||
Subsection (c) or (f), a taxable entity does not owe any tax and is | ||
not required to file a report that would otherwise be originally due | ||
on or after the date those rates are reduced to zero, regardless of | ||
whether the taxable entity would have computed the tax owed based on | ||
a rate provided by Section 171.002 or a rate provided by Section | ||
171.1016. | ||
(h) The comptroller shall make the determinations and | ||
estimates required by Subsections (b) and (f) and may adopt rules | ||
related to making those determinations and estimates. The | ||
comptroller shall publish the franchise tax rates in effect for a | ||
year in the Texas Register and on the comptroller's Internet | ||
website not later than January 15 of that year. | ||
(i) In the state fiscal year in which the rates of the | ||
franchise tax under Section 171.002 are reduced to zero under | ||
Subsection (c) or (f): | ||
(1) this chapter expires as provided by Section | ||
171.9321; and | ||
(2) not later than January 15 of that year the | ||
comptroller shall: | ||
(A) publish notice in the Texas Register that an | ||
entity previously subject to the tax imposed under this chapter is | ||
no longer required to file a report or pay the tax; and | ||
(B) provide any other notice relating to the | ||
expiration of the tax that the comptroller considers appropriate. | ||
(j) An action taken by the comptroller under this section is | ||
final and may not be appealed. | ||
SECTION 3. Sections 171.1016(b) and (e), Tax Code, are | ||
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 0.331 percent or, if applicable, an adjusted tax | ||
rate determined under Section 171.004. | ||
(e) A reference in this chapter or other law to the rate of | ||
the franchise tax means, as appropriate: | ||
(1) [ |
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taxable entity that elects to pay the tax as provided by this | ||
section, the rate under this section; or | ||
(2) the adjusted rates under Section 171.004. | ||
SECTION 4. Chapter 171, Tax Code, is amended by adding | ||
Subchapter Z to read as follows: | ||
SUBCHAPTER Z. EXPIRATION | ||
Sec. 171.9321. EXPIRATION. This chapter expires on | ||
December 31 of the year in which the rates of the franchise tax | ||
under Section 171.002 are reduced to zero under Section 171.004(c) | ||
or (f). | ||
SECTION 5. (a) 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 until barred by limitations. | ||
(b) The expiration 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, a suit filed against it, or a | ||
receiver appointed under Subchapter F, G, or H of that chapter; | ||
(2) the ability of the comptroller of public accounts, | ||
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 chapter expired; 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. | ||
SECTION 6. This Act applies only to a report originally due | ||
on or after January 1, 2018. | ||
SECTION 7. This Act takes effect September 1, 2017. |