Enrolled Bill Summary

Senate Bill 1689 amends the Tax Code to clarify the inapplicability of the franchise tax to certain payers of insurance premium taxes. It provides specifically that farm mutuals, local mutual aid associations, and burial associations are not subject to the franchise tax. Also, an insurance organization performing management or accounting activities on behalf of a nonadmitted captive insurance company that is required to pay a gross premium receipts tax during a tax year is exempt from the franchise tax for that same tax year. The bill clarifies that a business loss for franchise tax purposes can be carried forward only by the corporation that incurred the loss and cannot be transferred to or claimed by any other entity, including the survivor of a merger if the loss was incurred by the corporation that did not survive the merger.