By: Bosse H.B. No. 878
73R4356 CBH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the determination of taxable earned surplus of an S
1-3 corporation.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 171.110(d), Tax Code, is amended to read
1-6 as follows:
1-7 (d) A corporation's reportable federal taxable income is the
1-8 corporation's federal taxable income after Schedule C special
1-9 deductions and before net operating loss deductions as computed
1-10 under the Internal Revenue Code. An<, except that an> S
1-11 corporation's reportable federal taxable income is the amount of
1-12 the income reportable to the Internal Revenue Service as taxable to
1-13 the corporation's shareholders, minus the amount of income
1-14 reportable to the Internal Revenue Service as taxable to each
1-15 shareholder who is an officer or director of the corporation and
1-16 who renders, without compensation, services for the corporation for
1-17 which compensation could be authorized. The amount an S
1-18 corporation deducts under this subsection may not exceed $45,000.
1-19 SECTION 2. This Act takes effect January 1, 1994, and
1-20 applies to reports originally due on or after that date. The
1-21 change in law made by this Act does not affect the obligation for
1-22 or the payment, computation, and collection of the franchise tax
1-23 for a period not covered by this section.
1-24 SECTION 3. The importance of this legislation and the
2-1 crowded condition of the calendars in both houses create an
2-2 emergency and an imperative public necessity that the
2-3 constitutional rule requiring bills to be read on three several
2-4 days in each house be suspended, and this rule is hereby suspended.