By Craddick, Solomons H.B. No. 675
74R133 CBH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the computation of the net taxable earned surplus of a
1-3 limited liability company for franchise tax purposes.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 171.110(a), Tax Code, is amended to read
1-6 as follows:
1-7 (a) The net taxable earned surplus of a corporation is
1-8 computed by:
1-9 (1) determining the corporation's reportable federal
1-10 taxable income, subtracting from that amount any amount included in
1-11 reportable federal taxable income under Section 78 or Sections
1-12 951-964, Internal Revenue Code, <and> dividends received from a
1-13 subsidiary, associate, or affiliated corporation that does not
1-14 transact a substantial portion of its business or regularly
1-15 maintain a substantial portion of its assets in the United States,
1-16 and, if a limited liability company, income reported as a member's
1-17 net earnings from self-employment, and adding to that amount any
1-18 compensation of officers or directors, or if a bank, any
1-19 compensation of directors and executive officers, to the extent
1-20 excluded in determining federal taxable income to determine the
1-21 corporation's taxable earned surplus;
1-22 (2) apportioning the corporation's taxable earned
1-23 surplus to this state as provided by Section 171.106(b) or (c), as
1-24 applicable, to determine the corporation's apportioned taxable
2-1 earned surplus;
2-2 (3) adding the corporation's taxable earned surplus
2-3 allocated to this state as provided by Section 171.1061; and
2-4 (4) subtracting from that amount any allowable
2-5 deductions and any business loss that is carried forward to the tax
2-6 reporting period and deductible under Subsection (e).
2-7 SECTION 2. This Act takes effect January 1, 1996, and
2-8 applies to a report originally due on or after that date.
2-9 SECTION 3. The importance of this legislation and the
2-10 crowded condition of the calendars in both houses create an
2-11 emergency and an imperative public necessity that the
2-12 constitutional rule requiring bills to be read on three several
2-13 days in each house be suspended, and this rule is hereby suspended.