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House Bill 800 |
House Author: Murphy et al. |
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Effective: 1-1-14 |
Senate Sponsor: Deuell et al. |
House Bill 800 amends the Tax Code to provide for a sales tax exemption and franchise tax credit for certain research and development activities until December 31, 2026. The qualifying activities for the sales tax exemption are the sale, storage, or use of depreciable tangible personal property directly related to qualified research as defined by the bill. The activities that qualify for the franchise tax credit are qualified research activities in Texas as defined by federal law and by the comptroller of public accounts, who is authorized to adopt rules governing qualified research expenses. A person is ineligible to receive the sales tax exemption during a tax reporting period that the person claims the franchise tax credit.
House Bill 800 makes a taxable entity responsible for establishing entitlement to and the value of the franchise tax credit. The bill specifies the amount of the franchise tax credit generally and under certain circumstances, including circumstances relating to a taxable entity's contract with an institution of higher education for the performance of qualified research. The bill also specifies how qualified research expenses are to be attributed following the transfer of the controlling interest of a taxable entity to another taxable entity. The bill sets a limit on the total credit that can be claimed during a reporting period, establishes ineligibility for credit during certain reporting periods, and provides for combined reporting if the taxable entity is a combined group. The bill requires the comptroller to deposit enough franchise tax revenue to the credit of the property tax relief fund to offset any decrease in that fund resulting from the bill. The bill also requires the comptroller to submit certain estimates and evaluations relating to the franchise tax credit and sales tax exemption established by the bill.