By Maxey H.B. No. 2718 75R3685 DAK-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the imposition, collection, administration, and civil 1-3 and criminal enforcement of a tax on the income of certain resident 1-4 and nonresident individuals, trusts and estates, and partnerships. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Title 2, Tax Code, is amended by adding Subtitle 1-7 L to read as follows: 1-8 SUBTITLE L. PERSONAL INCOME TAX 1-9 CHAPTER 261. PERSONAL INCOME TAX 1-10 SUBCHAPTER A. IMPOSITION OF TAX 1-11 Sec. 261.001. Tax Imposed. (a) A tax is imposed for each 1-12 tax year: 1-13 (1) on the taxable income of every resident of this 1-14 state; and 1-15 (2) on the taxable income derived from sources in this 1-16 state of every nonresident. 1-17 (b) The tax rate is four percent of the amount of taxable 1-18 income that exceeds $89,500. 1-19 Sec. 261.002. JOINT RETURN OR RETURN OF SURVIVING SPOUSE. 1-20 If a husband and wife file a joint return, the tax imposed by 1-21 Section 261.001 is twice the tax that would be imposed if the 1-22 taxable income were divided by two. 1-23 Sec. 261.003. MEANING OF TERMS. (a) In this chapter: 1-24 (1) an individual is a resident of this state if the 2-1 individual: 2-2 (A) is domiciled in this state unless the 2-3 individual does not maintain a permanent place of abode in this 2-4 state and does maintain a permanent place of abode elsewhere and 2-5 spends, in the aggregate, not more than 30 days of the tax year in 2-6 this state; or 2-7 (B) is not domiciled in this state but maintains 2-8 a permanent place of abode in this state and spends, in the 2-9 aggregate, more than 183 days of the tax year in this state; and 2-10 (2) an individual is a nonresident if the individual 2-11 is not a resident of this state. 2-12 (b) Any term used in this chapter and not defined by or for 2-13 purposes of this chapter has the same meaning as when used in a 2-14 comparable context in the laws of the United States relating to 2-15 federal income taxes, unless a different meaning is clearly 2-16 required. Any reference in this chapter to federal law means the 2-17 provisions of the Internal Revenue Code of 1986 in effect on 2-18 December 31, 1997, and other provisions of federal laws relating to 2-19 federal income taxes in effect on December 31, 1997. 2-20 (Sections 261.004-261.050 reserved for expansion 2-21 SUBCHAPTER B. COMPUTATION OF TAXABLE INCOME 2-22 Sec. 261.051. Taxable Income. The taxable income of a 2-23 resident of this state is the resident's federal adjusted gross 2-24 income as defined by the federal law. 2-25 Sec. 261.052. Credit for Income Tax Paid to Another State. 2-26 (a) A resident individual is allowed a credit against the tax 2-27 otherwise due under this chapter for the amount of any income tax 3-1 imposed on the individual for the tax year by another state of the 3-2 United States on income that is derived from sources in that state 3-3 and that is subject to tax under this chapter. 3-4 (b) The credit provided by this section may not exceed the 3-5 proportion of the tax otherwise due under this chapter that the 3-6 amount of the taxpayer's adjusted gross income derived from sources 3-7 in the other taxing jurisdiction bears to the taxpayer's entire 3-8 adjusted gross income as modified by this subchapter. 3-9 Sec. 261.053. Dual Residence; Reduction of Tax. If a 3-10 taxpayer is a resident of this state and is regarded as a resident 3-11 of another jurisdiction for purposes of personal income taxation, 3-12 the comptroller shall reduce the tax on that portion of the 3-13 taxpayer's income that is subject to tax in both jurisdictions 3-14 solely by virtue of dual residence. The reduction shall be in an 3-15 amount equal to that portion of the lower of the two taxes 3-16 applicable to the income taxed twice that the tax imposed by this 3-17 state bears to the combined taxes of the two jurisdictions on the 3-18 income taxed twice. 3-19 Sec. 261.054. Nonresident Individuals--Taxable Income. The 3-20 taxable income of a nonresident individual is that part of the 3-21 individual's federal adjusted gross income derived from sources in 3-22 this state determined under Section 261.056. 3-23 Sec. 261.055. Husband and Wife--Nonresident. (a) If the 3-24 federal taxable income of a husband and wife, both of whom are 3-25 nonresidents of this state, is determined on separate federal 3-26 returns, their taxable incomes in this state shall be separately 3-27 determined. 4-1 (b) If the federal taxable income of a husband and wife, 4-2 both of whom are nonresidents, is determined on a joint federal 4-3 return, their tax shall be determined in this state on their 4-4 combined taxable income. 4-5 (c) If one spouse is a nonresident and the other a resident, 4-6 separate taxes shall be determined on their separate taxable 4-7 incomes in this state on forms prescribed by the comptroller unless 4-8 both elect to determine their combined taxable income in this state 4-9 as if both were residents. If a husband and wife file a joint 4-10 federal income tax return but determine their taxable income in 4-11 this state separately, they must compute their taxable incomes in 4-12 this state as if their federal adjusted gross incomes had been 4-13 determined separately. 4-14 Sec. 261.056. Adjusted Gross Income From Sources in This 4-15 State--Nonresident. (a) The adjusted gross income of a 4-16 nonresident derived from sources in this state is the net amount of 4-17 items of income, gain, loss, and deduction entering into the 4-18 nonresident's federal adjusted gross income that are derived from 4-19 or connected with sources in this state including: 4-20 (1) the nonresident's distributive share of 4-21 partnership income and deductions determined under Section 261.403; 4-22 and 4-23 (2) the nonresident's share of estate or trust income 4-24 and deductions derived from sources in this state. 4-25 (b) Items of income, gain, loss, and deduction derived from 4-26 or connected with sources in this state are those items 4-27 attributable to: 5-1 (1) the ownership or disposition of an interest in 5-2 real or tangible personal property in this state; and 5-3 (2) a business, trade, profession, or occupation 5-4 conducted in this state. 5-5 (c) Income from intangible personal property including 5-6 annuities, dividends, interest, and gains from the disposition of 5-7 intangible personal property, constitutes income derived from 5-8 sources in this state only to the extent that the income is from 5-9 property used in a business, trade, profession, or occupation 5-10 carried on in this state. 5-11 (d) Deductions for capital losses, net long-term capital 5-12 gains, and net operating losses derived from or connected with 5-13 sources in this state, are determined in the same manner as the 5-14 corresponding federal deductions. However, the extent to which the 5-15 deductions are derived from or connected with sources in this state 5-16 is determined under the comptroller's rules. 5-17 (e) For a nonresident individual who is a shareholder of a 5-18 corporation that is an electing small business corporation for 5-19 federal income tax purposes, the undistributed taxable income of 5-20 the corporation does not constitute income derived from sources in 5-21 this state and a net operating loss of the corporation does not 5-22 constitute a loss or deduction connected with sources in this 5-23 state. 5-24 (f) If a business, trade, profession, or occupation is 5-25 carried on partly in and partly outside this state, the items of 5-26 income and deduction derived from or connected with sources in this 5-27 state are determined by apportionment and allocation consistent 6-1 with Chapter 141 under the comptroller's rules. 6-2 (g) Compensation paid by the United States for service in 6-3 the armed forces of the United States performed by a nonresident is 6-4 not income derived from sources in this state. 6-5 (Sections 261.057-261.100 reserved for expansion 6-6 SUBCHAPTER C. WITHHOLDING TAX 6-7 Sec. 261.101. Employer to Withhold Tax From Wages. 6-8 (a) Each employer maintaining an office or doing business in this 6-9 state and making payment of wages taxable under this chapter to a 6-10 resident or nonresident individual shall withhold from those wages 6-11 for each payroll period a tax computed in a manner as to result, so 6-12 far as practicable, in withholding from the employee's wages during 6-13 each calendar year an amount equivalent to the amount of tax 6-14 reasonably estimated to be due from the employee under this chapter 6-15 from the amount of the wages paid by the employer and included in 6-16 the employee's adjusted gross income during the calendar year. The 6-17 method of determining the amount to be withheld shall be prescribed 6-18 by the comptroller's rules. Payments by the United States for 6-19 service in the armed forces of the United States are not subject to 6-20 state withholding. 6-21 (b) The comptroller may enter into agreements with the tax 6-22 departments of other states that require income tax to be withheld 6-23 from the payment of wages and salaries to govern the amounts to be 6-24 withheld from the wages and salaries of residents of those states 6-25 under this chapter. The agreements may provide for recognition of 6-26 anticipated tax credits in determining the amounts to be withheld, 6-27 and the comptroller, by rule, may relieve employers in this state 7-1 from withholding income tax on wages and salaries paid to 7-2 nonresident employees. An agreement authorized by this section is 7-3 subject to the condition that the tax department of the other state 7-4 grants similar treatment to residents of this state. 7-5 Sec. 261.102. Information Statement for Employee. An 7-6 employer required to withhold the tax under Section 261.101 from 7-7 the wages of an employee shall furnish to each employee from whom 7-8 the employer withheld the tax during the calendar year a written 7-9 statement as prescribed by rule showing the amount of wages paid by 7-10 the employer to the employee, the amount deducted and withheld as 7-11 tax, and other information the comptroller prescribes. The 7-12 withholding statement shall be given to the employee from whom the 7-13 tax is withheld on or before February 15 of the year succeeding the 7-14 calendar year in which the withholding occurs or, if the employee's 7-15 employment ends during the calendar year, before the 31st day after 7-16 the last day on which wages are paid to the employee. 7-17 Sec. 261.103. Credit for Tax Withheld. Wages on which the 7-18 withholding tax applies are included fully as taxable income under 7-19 this chapter as if no withholding were required. The amount of 7-20 withholding tax actually withheld under this subchapter in a 7-21 calendar year is considered to have been paid to the comptroller on 7-22 behalf of the person from whom withheld, and the person shall be 7-23 credited with having paid that amount of tax for the tax year in 7-24 which the wages are taxed. For a tax year of less than 12 months, 7-25 the credit shall be made under rules of the comptroller. 7-26 Sec. 261.104. Employer's Return and Payment of Tax Withheld. 7-27 (a) An employer required to deduct and withhold tax under this 8-1 chapter shall, for each calendar quarter, on or before the 15th 8-2 day of the month following the end of the calendar quarter, file a 8-3 withholding return as prescribed by the comptroller and pay to the 8-4 comptroller or to a depository designated by the comptroller, the 8-5 taxes required to be withheld, except that for the fourth quarter 8-6 of the calendar year, the return shall be filed and the taxes paid 8-7 on or before January 31 of the succeeding year. If the amount 8-8 required to be withheld by an employer for a calendar month exceeds 8-9 $500, the employer shall not later than the 15th day of the 8-10 succeeding month pay the withheld amount to the comptroller or to a 8-11 depository designated by the comptroller. The amount paid is 8-12 allowed as a credit against the liability shown on the employer's 8-13 quarterly withholding return required by this section. If the 8-14 amount required to be deducted and withheld by an employer is less 8-15 than $100 in a calendar quarter, the comptroller by rule may permit 8-16 an employer to file a withholding return on or before July 31 for 8-17 the semiannual period ending on June 30 and on or before January 31 8-18 of the succeeding year for the semiannual period ending on December 8-19 31. The comptroller may, if it is necessary for the protection of 8-20 the revenue, require an employer to make a return and pay to the 8-21 comptroller the tax withheld at any time. If the amount of wages 8-22 paid by an employer is not sufficient under this chapter to require 8-23 the withholding of tax from the wages of any of the employer's 8-24 employees, the comptroller by rule may permit the employer to file 8-25 an annual return on or before January 31 of the succeeding calendar 8-26 year. 8-27 (b) If an employer fails to collect the tax, truthfully 9-1 account for the tax, pay the tax, or make returns of the tax as 9-2 required by this section, the comptroller may serve a notice 9-3 requiring the employer to collect the taxes that became collectible 9-4 after service of notice, to deposit the taxes in a bank approved by 9-5 the comptroller, in a separate account, in trust for and payable to 9-6 the comptroller, and to keep the amount of the tax in the account 9-7 until paid over to the comptroller. A notice remains in effect 9-8 until a notice of cancellation is served by the comptroller. 9-9 Sec. 261.105. EMPLOYER'S LIABILITY FOR WITHHELD TAXES. An 9-10 employer required to withhold a tax under this chapter is liable 9-11 for the tax. For purposes of assessment and collection, any amount 9-12 required to be withheld and paid to the comptroller, and any 9-13 additions to tax, penalties, and interest with respect to it, is 9-14 the tax of the employer. Any amount of tax actually deducted and 9-15 withheld under this chapter shall be held to be a special fund in 9-16 trust for the comptroller. An employee does not have a right of 9-17 action against his employer in respect to money withheld from the 9-18 employee's wages and paid over to the comptroller in compliance or 9-19 in intended compliance with this chapter. 9-20 Sec. 261.106. EMPLOYER'S FAILURE TO WITHHOLD. If an 9-21 employer fails to withhold tax as required, and thereafter the tax 9-22 against which that tax may be credited is paid, the tax so required 9-23 to be withheld may not be collected from the employer, but the 9-24 employer is liable for additions to tax penalties or interest 9-25 otherwise applicable resulting from a failure to withhold. 9-26 (Sections 261.107-261.200 reserved for expansion 10-1 SUBCHAPTER D. ACCOUNTING PERIODS AND METHODS 10-2 Sec. 261.201. PERIOD FOR COMPUTATION OF TAXABLE INCOME. 10-3 (a) For purposes of the tax imposed by this chapter, a taxpayer's 10-4 tax year is the same as the taxpayer's tax year for federal income 10-5 tax purposes. 10-6 (b) If a taxpayer's tax year is changed for federal income 10-7 tax purposes, the taxpayer's tax year for purposes of the tax 10-8 imposed by this chapter shall be similarly changed. 10-9 Sec. 261.202. METHODS OF ACCOUNTING. (a) A taxpayer's 10-10 method of accounting is the same as the taxpayer's method of 10-11 accounting for federal income tax purposes. If a single method of 10-12 accounting has not been regularly used by the taxpayer, taxable 10-13 income for purposes of this chapter shall be computed under any 10-14 method that in the opinion of the comptroller fairly reflects 10-15 income. 10-16 (b) If a taxpayer's method of accounting is changed for 10-17 federal income tax purposes, the taxpayer's method of accounting 10-18 for purposes of this chapter is changed in the same manner. 10-19 Sec. 261.203. ADJUSTMENTS. In computing a taxpayer's 10-20 taxable income for any tax year under a method of accounting 10-21 different from the method under which the taxpayer's taxable income 10-22 for the previous year was computed, there shall be taken into 10-23 account those adjustments that are determined, under rules 10-24 prescribed by the comptroller, to be necessary solely by reason of 10-25 the change in order to prevent amounts from being duplicated or 10-26 omitted. 10-27 Sec. 261.204. LIMITATION ON ADDITIONAL TAX. (a) If a 11-1 taxpayer's method of accounting is changed, other than from an 11-2 accrual to an installment method, an additional tax that results 11-3 from adjustments determined to be necessary solely because of the 11-4 change may not be greater than if those adjustments were ratably 11-5 allocated and included for the tax year of the change and not more 11-6 than two preceding tax years during which the taxpayer used the 11-7 method of accounting from which the change is made. 11-8 (b) If a taxpayer's method of accounting is changed from an 11-9 accrual to an installment method, an additional tax for the year of 11-10 the change of method and for a subsequent year that is attributable 11-11 to the receipt of installment payments properly accrued in a prior 11-12 year shall be reduced by the portion of tax for any prior tax year 11-13 attributable to the accrual of the installment payments, under 11-14 rules adopted by the comptroller. 11-15 (Sections 261.205-261.400 reserved for expansion 11-16 SUBCHAPTER E. PARTNERS AND PARTNERSHIPS 11-17 Sec. 261.401. ENTITY NOT TAXABLE. A partnership as an 11-18 entity is not subject to the tax imposed by this chapter. Persons 11-19 carrying on business as partners are liable for the tax imposed by 11-20 this chapter only in their separate or individual capacities. 11-21 Sec. 261.402. RESIDENT PARTNER--ADJUSTED GROSS INCOME. 11-22 (a) Partnership income, gain, loss, or deduction shall be 11-23 allocated in accordance with each partner's distributive share for 11-24 federal income tax purposes. 11-25 (b) Each item of partnership income, gain, loss, or 11-26 deduction has the same character for a partner under this chapter 11-27 as it has for federal income tax purposes. If an item is not 12-1 characterized for federal income tax purposes, it has the same 12-2 character for a partner as if realized directly from the source 12-3 from which realized by the partnership or incurred in the same 12-4 manner as incurred by the partnership. 12-5 (c) If a partner's distributive share of an item of 12-6 partnership income, gain, loss, or deduction is determined for 12-7 federal income tax purposes by a special provision in the 12-8 partnership agreement with respect to the item, and the principal 12-9 purpose of the provision is the avoidance or evasion of tax under 12-10 this chapter, the partner's distributive share of the item and a 12-11 modification required with respect to it is determined in 12-12 accordance with the partner's distributive share of the taxable 12-13 income or loss of the partnership generally, excluding those items 12-14 requiring separate computation under Section 702 of the Internal 12-15 Revenue Code of 1986. 12-16 Sec. 261.403. NONRESIDENT PARTNER--ADJUSTED GROSS INCOME 12-17 FROM SOURCES IN THIS STATE. (a) In determining the adjusted gross 12-18 income of a nonresident partner of any partnership, there shall be 12-19 included only that part derived from or connected with sources in 12-20 this state of the partner's distributive share of items of 12-21 partnership income, gain, loss, and deduction entering into the 12-22 partner's federal adjusted gross income, as that part is determined 12-23 under rules adopted by the comptroller and consistent with the 12-24 rules under Section 261.056. 12-25 (b) Except as authorized in Subsection (c), in determining 12-26 the sources of a nonresident partner's income, no effect is given 12-27 to a provision in the partnership agreement that: 13-1 (1) characterizes payments to the partner as being for 13-2 services or for the use of capital, or allocated to the partner, as 13-3 income or gain from sources outside this state, a greater 13-4 proportion of his distributive share of partnership income or gain 13-5 than the ratio of partnership income or gain from sources outside 13-6 this state to partnership income or gain from all sources; or 13-7 (2) allocates to the partner a greater proportion of a 13-8 partnership item of loss or deduction connected with sources in 13-9 this state than the partner's proportionate share, for federal 13-10 income tax purposes, of partnership loss or deduction generally. 13-11 (c) The comptroller may, on application, authorize the use 13-12 of other methods of determining a nonresident partner's portion of 13-13 partnership items derived from or connected with sources in this 13-14 state, and the modifications related to it, that are appropriate 13-15 and equitable, on terms and conditions the comptroller may require. 13-16 (d) A nonresident partner's distributive share of items of 13-17 income, gain, loss, or deduction is determined under Section 13-18 261.402(a). The character of partnership items for a nonresident 13-19 partner is determined under Section 261.402(b). The effect of a 13-20 special provision in a partnership agreement, other than a 13-21 provision referred to in Subsection (b), having as a principal 13-22 purpose the avoidance or evasion of tax under this chapter is 13-23 determined under Section 261.402(c). 13-24 (Sections 261.404-261.500 reserved for expansion 13-25 SUBCHAPTER F. TAX RETURNS AND PAYMENTS 13-26 Sec. 261.501. PERSONS REQUIRED TO MAKE RETURNS OF INCOME. A 13-27 state income tax return shall be made by every individual who has 14-1 adjusted gross income from sources in this state of more than 14-2 $89,500. 14-3 Sec. 261.502. JOINT RETURNS BY HUSBAND AND WIFE. (a) A 14-4 husband and wife may make a joint state income tax return even 14-5 though one of the spouses has no gross income or deductions except 14-6 that: 14-7 (1) a joint return may not be made if the spouses are 14-8 not permitted to file a joint federal income tax return; 14-9 (2) if the federal income tax liability of either 14-10 spouse is determined on a separate federal return, their income tax 14-11 liabilities under this chapter shall be determined on separate 14-12 returns; 14-13 (3) if the federal income tax liabilities of husband 14-14 and wife, other than a husband and wife described in Subsection 14-15 (b), are determined on a joint federal return, the husband and wife 14-16 shall file a joint return under this chapter and their tax 14-17 liabilities are joint and several; and 14-18 (4) if neither spouse is required to file a federal 14-19 income tax return and either or both are required to file an income 14-20 tax return under this chapter, they may elect to file separate 14-21 returns or a joint return, and according to their election, their 14-22 liabilities are separate or joint and several. 14-23 (b) If either husband or wife is a resident and the other is 14-24 a nonresident, they shall file on forms required by the comptroller 14-25 separate income tax returns in this state if either spouse has 14-26 income that is not community property, and in that case their tax 14-27 liabilities are separate; but they may elect to determine their 15-1 joint taxable income as if both were residents, and in that case 15-2 their liabilities are joint and several. 15-3 Sec. 261.503. RETURNS BY FIDUCIARIES. (a) An income tax 15-4 return for a deceased individual shall be made and filed by the 15-5 executor, administrator, or other person charged with the care of 15-6 the property of the decedent. A final return of a decedent is due 15-7 when it would have been due if the decedent had not died. 15-8 (b) An income tax return for an individual who is unable to 15-9 make a return because of minority or other disability shall be made 15-10 and filed by the individual's duly authorized agent, guardian, 15-11 conservator, fiduciary, or other person charged with the care of 15-12 the individual or the individual's property other than a receiver 15-13 in possession of only a part of the individual's property. 15-14 (c) If two or more fiduciaries are acting jointly, the 15-15 return may be made by any one of them. 15-16 Sec. 261.504. NOTICE OF QUALIFICATION AS RECEIVER. A 15-17 receiver, trustee in bankruptcy, assignee for benefit of creditors, 15-18 or other similar fiduciary shall give notice of his or her 15-19 qualification to the comptroller, as may be required by rule. 15-20 Sec. 261.505. CHANGE OF STATUS AS RESIDENT OR NONRESIDENT 15-21 DURING YEAR. (a) If the status of an individual changes during 15-22 the individual's tax year from resident to nonresident or from 15-23 nonresident to resident, the comptroller by rule may require the 15-24 individual to file one return for the portion of the year during 15-25 which the individual is a resident and one for the portion of the 15-26 year during which the individual is a nonresident. 15-27 (b) Except as provided in Subsection (c), the taxable income 16-1 of an individual is determined as provided in Section 261.051 for 16-2 residents and Section 261.054 for nonresidents as if the 16-3 individual's tax year for federal income tax purposes were limited 16-4 to the period of the individual's resident and nonresident status 16-5 respectively. 16-6 (c) There shall be included in determining taxable income 16-7 from sources in or outside this state, as the case may be, income, 16-8 gain, loss, or deduction accrued prior to the change of status even 16-9 though not otherwise includable or allowable in respect to the 16-10 period before the change, but the taxation or deduction of items 16-11 accrued before the change of status is not affected by the change. 16-12 (d) If two returns are required to be filed under this 16-13 section, the total of the taxes due may not be less than would be 16-14 due if the total of the taxable incomes reported on the two returns 16-15 were includable in one return. 16-16 Sec. 261.506. TIME AND PLACE FOR FILING RETURNS AND PAYING 16-17 TAX. The income tax return required by this chapter shall be filed 16-18 not later than the 15th day of the fourth month following the end 16-19 of the taxpayer's tax year. A person required to make and file a 16-20 return under this chapter shall pay a tax due to the comptroller 16-21 not later than the last day that the filing of the return is 16-22 allowed without penalty, excluding an extension of time for filing 16-23 the return. The comptroller by rule shall prescribe the place for 16-24 filing a return, statement, or other document required by this 16-25 chapter and for the payment of a tax. 16-26 Sec. 261.507. ESTIMATED TAX. (a) An individual subject to 16-27 the income tax imposed by this chapter shall make estimated 17-1 payments of the tax. The provisions of Section 6654, Internal 17-2 Revenue Code of 1986, other than Subsections (a), (b), (d)(2), and 17-3 (e) of that section, governing the payment of estimated federal 17-4 income taxes on individuals apply to the payments required by this 17-5 section, including exemptions from the estimated tax payment 17-6 requirement. A reference in that section to the federal income tax 17-7 imposed on individuals is construed as a reference to the tax 17-8 imposed by this chapter as required to administer this section. A 17-9 power or duty given by Section 6654 to the United States secretary 17-10 of the treasury is assigned to the comptroller for purposes of the 17-11 estimated payments required by this section. 17-12 (b) The comptroller shall adopt rules for the administration 17-13 of this section. 17-14 (c) Payment of the estimated tax or an installment is 17-15 considered payment on account of the tax imposed by this chapter. 17-16 Sec. 261.508. Extension of Time for Filing and Payment. (a) 17-17 The comptroller, on terms and conditions the comptroller may 17-18 require, may grant a reasonable extension of time for payment of 17-19 tax or an installment, or for filing a return, statement, or other 17-20 document required under this chapter. Except for an extension for 17-21 a taxpayer who is outside the United States, an extension for 17-22 filing any return, statement, or document may not exceed six 17-23 months. 17-24 (b) If the time for the payment of an amount of tax is 17-25 extended, the comptroller may require the taxpayer to furnish a 17-26 bond or other security in an amount not exceeding twice the amount 17-27 of tax for which the extension of time for payment is granted, on 18-1 terms and conditions the comptroller may require. 18-2 Sec. 261.509. Change of Election. An election expressly 18-3 authorized by this chapter may be changed as authorized by the 18-4 comptroller or by the comptroller's rule. 18-5 Sec. 261.510. Signing of Returns and Other Documents. (a) 18-6 A return, statement, or other document required to be made or filed 18-7 under this chapter shall be signed as provided by the comptroller. 18-8 An individual's name signed to a return, statement, or other 18-9 document is prima facie evidence that the individual signed the 18-10 return, statement, or other document. 18-11 (b) A return, statement, or other document required of a 18-12 partnership must be signed by at least one partner. A partner's 18-13 name signed to a return, statement, or other document is prima 18-14 facie evidence that the partner is authorized to sign on behalf of 18-15 the partnership. 18-16 (c) The making or filing of a return, statement, or other 18-17 document or copy required to be made or filed under this chapter, 18-18 including a copy of a federal return, constitutes a certification 18-19 by the person making or filing the return, statement, or other 18-20 document or copy that the statements contained in it are true and 18-21 that a copy filed is a true copy. 18-22 (Sections 261.511-261.520 reserved for expansion 18-23 SUBCHAPTER G. INFORMATION RETURNS 18-24 Sec. 261.521. General Requirements. The comptroller by rule 18-25 may require the keeping of records, the content and form of returns 18-26 and statements, and the filing of copies of federal income returns 18-27 and determinations. The comptroller may require a person, by rule 19-1 or by notice served on the person, to make returns, render 19-2 statements, or keep records, as the comptroller considers 19-3 sufficient to show whether the person is liable under this chapter 19-4 for tax or for the collection of tax. 19-5 Sec. 261.522. Partnership Return. Each partnership having a 19-6 resident partner or having income derived from sources in this 19-7 state, determined in accordance with the applicable rules of 19-8 Section 261.056 as in the case of a nonresident individual, shall 19-9 make a return for the tax year setting forth all items of income, 19-10 gain, loss, and deduction, and the names and addresses of the 19-11 individuals, whether residents or nonresidents, who would be 19-12 entitled to share in the net income if distributed and the amount 19-13 of the distributive share of each individual, and other relevant 19-14 information the comptroller requires by rules or instructions. The 19-15 return must be filed not later than the 15th day of the fourth 19-16 month following the end of each tax year. For purposes of this 19-17 section, "tax year" means a year or period that would be a tax year 19-18 of the partnership if it were subject to tax under this chapter. 19-19 Sec. 261.523. Information Returns. The comptroller by rule 19-20 may require returns of information to be made and filed not later 19-21 than February 28 of each year by a person making payment or 19-22 crediting in a calendar year the amount of $600 or more ($10 or 19-23 more in the case of interest or dividends) to a person who may be 19-24 subject to the tax imposed under this chapter. The returns may be 19-25 required of any person, including a lessee or mortgagor of real or 19-26 personal property, a fiduciary, an employer, and an officer or 19-27 employee of this state, or of any municipality or other political 20-1 subdivision of this state, having the control, receipt, custody, 20-2 disposal, or payment of dividends, interest, rents, salaries, 20-3 wages, premiums, annuities, compensations, remunerations, 20-4 emoluments, or other fixed or determinable gains, profits, or 20-5 income, except interest coupons payable to bearer. A copy of the 20-6 withholding statement required to be furnished by an employer to an 20-7 employee constitutes the return of information required to be made 20-8 under this section for wages. 20-9 Sec. 261.524. Report of Change in Federal Taxable Income. 20-10 (a) If the amount of a taxpayer's federal taxable income reported 20-11 on the taxpayer's federal income tax return for a tax year is 20-12 changed or corrected by the United States Internal Revenue Service 20-13 or other competent authority, or as the result of a renegotiation 20-14 of a contract or subcontract with the United States, the taxpayer 20-15 shall: 20-16 (1) report the change or correction in federal taxable 20-17 income not later than the 90th day after the final determination of 20-18 the change, correction, or renegotiation, or as required by the 20-19 comptroller; and 20-20 (2) concede the accuracy of the determination or state 20-21 in what way it is erroneous. 20-22 (b) A taxpayer filing an amended federal income tax return 20-23 shall also file, not later than the 90th day after filing, an 20-24 amended return under this chapter, and shall give any information 20-25 required by the comptroller. 20-26 (c) The comptroller by rule may prescribe exceptions to the 20-27 requirements of this section. 21-1 (Sections 261.525-261.600 reserved for expansion 21-2 SUBCHAPTER H. ADDITIONS TO TAX; PENALTIES 21-3 Sec. 261.601. Failure to File Tax Return. (a) A person who 21-4 does not file a return required under this chapter on or before the 21-5 prescribed date is subject to the following penalty based on a 21-6 percentage of the full amount of tax owed on the prescribed day: 21-7 (1) if the return is filed not later than the 30th day 21-8 after the prescribed date, five percent; 21-9 (2) if the return is filed later than the 30th day 21-10 after the prescribed date, but not later than the 60th day after 21-11 the prescribed date, 10 percent; 21-12 (3) if the return is filed later than the 60th day 21-13 after the prescribed date, but not later than the 90th day after 21-14 the prescribed date, 15 percent; 21-15 (4) if the return is filed later than the 90th day 21-16 after the prescribed date, but not later than the 120th day after 21-17 the prescribed date, 20 percent; or 21-18 (5) if the return is filed later than the 120th day 21-19 after the prescribed date, 25 percent. 21-20 (b) The prescribed date is determined with regard to an 21-21 extension of time for filing. 21-22 (c) In determining the amount owed on the prescribed date, 21-23 the taxpayer is entitled to credit for a portion of the tax paid on 21-24 or before the prescribed date and other credit that may be claimed 21-25 on the return. 21-26 (d) The penalty required by this section does not apply if 21-27 the taxpayer shows that the failure to file a return was not the 22-1 result of wilful neglect before the prescribed date or at any time 22-2 during the delinquency and that good cause for the failure existed 22-3 at all times before filing. 22-4 Sec. 261.602. Failure to File Information Return. (a) A 22-5 person who does not file a statement of payment to another person 22-6 required under the authority of this chapter or a duplicate 22-7 statement of tax withheld on wages on or before the prescribed date 22-8 for filing shall, after notice and demand by the comptroller, pay a 22-9 penalty of $5 for each statement not timely filed. 22-10 (b) The total amount of penalties imposed under this section 22-11 on any person during a single calendar year may not exceed $2,000. 22-12 (c) The prescribed date for filing is determined with regard 22-13 to any extension of time for filing. 22-14 (d) The penalty required by this section is not applicable 22-15 if the person required to file the statement shows that the failure 22-16 to file did not result from wilful neglect and that there was good 22-17 cause for the failure. 22-18 Sec. 261.603. Failure to Pay Tax. (a) A person who does 22-19 not pay any amount of tax owed by the person on the prescribed date 22-20 shall pay, in addition to all other penalties and additions, a 22-21 penalty of 10 percent of the amount of the tax due and owing on the 22-22 prescribed date. 22-23 (b) The prescribed date is determined with regard to 22-24 extensions of time allowed by the comptroller. 22-25 (c) A failure to pay all or part of an estimated tax is 22-26 considered to be an underpayment of estimated tax. The comptroller 22-27 by rule shall prescribe the method of determining the amount and 23-1 period of underpayment. 23-2 Sec. 261.604. Failure to Pay Over Withholding Tax. (a) An 23-3 employer who fails to pay the tax withheld by the employer or 23-4 required to be withheld by the employer at the time required under 23-5 this chapter is liable for the amount of the unpaid tax in addition 23-6 to the amount of the penalty prescribed in Section 261.603 together 23-7 with interest on the full amount of tax and penalty due. 23-8 (b) Interest and addition assessed under this section may 23-9 not be collected from the employee by the employer. 23-10 (c) The comptroller has the same rights and powers for the 23-11 collection of the tax, addition, and interest against an employer 23-12 as are prescribed for the collection of the tax against an 23-13 individual. 23-14 Sec. 261.605. Penalties and Additions Treated as Tax. The 23-15 penalties and additions provided by this subchapter shall be paid 23-16 on notice and demand and shall be assessed, collected, and paid in 23-17 the same manner as other taxes. The comptroller may issue a 23-18 deficiency notice for all or part of a penalty or addition along 23-19 with or separate from the amount of tax owed in absence of 23-20 additions or penalties. 23-21 (Sections 261.606-261.630 reserved for expansion 23-22 SUBCHAPTER I. CREDITS AND REFUNDS 23-23 Sec. 261.631. Credits and Refunds. (a) Within the 23-24 applicable period of limitations the comptroller may credit an 23-25 overpayment of income tax and interest on the overpayment against a 23-26 liability of a tax imposed by the tax laws of this state on the 23-27 person who made the overpayment, and the balance shall be refunded 24-1 by the comptroller out of the proceeds of the tax retained by the 24-2 comptroller. 24-3 (b) If the amount allowable as a credit for tax withheld 24-4 from the taxpayer exceeds the tax to which the credit relates, the 24-5 excess is an overpayment. 24-6 (c) If there has been an overpayment of tax required to be 24-7 deducted and withheld under Section 261.101, refund shall be made 24-8 to the employer only to the extent that the amount of the 24-9 overpayment was not deducted and withheld by the employer. 24-10 (d) The comptroller may prescribe rules providing for 24-11 crediting against the estimated tax for a tax year the amount 24-12 determined to be an overpayment of the income tax for a preceding 24-13 tax year. 24-14 (e) If an amount of income tax is assessed and collected 24-15 after the expiration of the period of limitations properly 24-16 applicable, the amount is an overpayment. 24-17 Sec. 261.632. Abatements. (a) The comptroller may abate 24-18 any unpaid portion of a tax or a tax liability that is excessive in 24-19 amount, assessed after the expiration of the applicable period of 24-20 limitations, or erroneously or illegally assessed. 24-21 (b) The comptroller may abate the unpaid portion of a tax or 24-22 a tax liability if the comptroller determines under uniform rules 24-23 prescribed by the comptroller that the administration and 24-24 collection costs involved would not warrant collection of the 24-25 amount due. 24-26 Sec. 261.633. EXTENDED LIMITATION PERIOD. (a) If a 24-27 taxpayer is required by Section 261.524 to report a change or 25-1 correction in federal taxable income reported on a federal income 25-2 tax return, or to report a change or correction that is treated in 25-3 the same manner as if it were an overpayment for federal income tax 25-4 purposes, or to file an amended return with the comptroller, a 25-5 claim for credit or refund of a resulting overpayment of tax must 25-6 be filed by the taxpayer not later than two years after the notice 25-7 of the change or correction or the amended return was required to 25-8 be filed with the comptroller. If the report or amended return 25-9 required by Section 261.524 is not filed within the period 25-10 specified by that section, interest on a resulting refund or credit 25-11 ceases to accrue after the period. The amount of credit or refund 25-12 may not exceed the amount of the reduction in tax attributable to 25-13 the federal change, correction, or items amended on the taxpayer's 25-14 amended federal income tax return. This subsection does not affect 25-15 the time within which or the amount for which a claim for credit or 25-16 refund may be filed apart from this section. 25-17 (b) If a claim for credit or refund relates to an 25-18 overpayment of tax on account of the deductibility by the taxpayer 25-19 of a debt as a debt that became worthless or a loss from 25-20 worthlessness of a security or the effect that the deductibility of 25-21 a debt or of a loss has on the application to the taxpayer of a 25-22 carryover, the claim may be made, under rules adopted by the 25-23 comptroller, not later than the seventh year after the date 25-24 prescribed by law for filing the return for the year with respect 25-25 to which the claim is made. 25-26 (c) If a claim for credit or refund relates to an 25-27 overpayment attributable to a net operating loss carryback, the 26-1 claim may be made, under rules adopted by the comptroller, not 26-2 later than the 15th day of the 40th month following the end of the 26-3 tax year of the net operating loss that resulted in the carryback 26-4 or the period prescribed by Section 111.104, whichever expires 26-5 later. 26-6 (Sections 261.634-261.650 reserved for expansion 26-7 SUBCHAPTER J. MISCELLANEOUS ENFORCEMENT PROVISIONS 26-8 Sec. 261.651. Taxpayer not Resident. If notice and demand 26-9 for the payment of a tax is given to a nonresident and it appears 26-10 to the comptroller that it is not practicable to locate property of 26-11 the taxpayer sufficient in amount to cover the amount of tax due, 26-12 the comptroller may authorize the institution of any available 26-13 action or proceeding to collect or enforce the claim in any place 26-14 by any procedure by which a civil judgment of a court of record of 26-15 this state could be collected or enforced. The comptroller may 26-16 designate agents or retain counsel outside this state for the 26-17 purpose of collecting taxes due under this chapter and require of 26-18 them bonds or other security for the faithful performance of their 26-19 duties. The comptroller may enter into agreements with the tax 26-20 department of another state for the collection of taxes from 26-21 persons found in this state who are delinquent in the payment of 26-22 income taxes imposed by that state on condition that the agreeing 26-23 state afford similar assistance in the collection of taxes from 26-24 persons found in that state who are delinquent in the payment of 26-25 taxes imposed by this chapter. 26-26 Sec. 261.652. Income Tax Claims of Other States. The courts 26-27 of this state shall recognize and enforce liabilities for personal 27-1 income taxes lawfully imposed by another state that extends a like 27-2 comity to this state, and the duly authorized officer of the other 27-3 state may sue for the collection of personal income tax in the 27-4 courts of this state. A certificate by the secretary of state of 27-5 the other state that an officer suing for the collection of the tax 27-6 is duly authorized to collect the tax is conclusive proof of the 27-7 officer's authority. For the purposes of this section, "taxes" 27-8 includes additions to tax, interest, and penalties. 27-9 Sec. 261.653. Order to Compel Compliance. (a) On 27-10 application of the attorney general, a judge of a court of 27-11 appropriate jurisdiction for the county in which a taxpayer or 27-12 other person who intentionally or knowingly refuses to file a tax 27-13 return required by this chapter may, by order, direct the person to 27-14 file the return. A person who fails or refuses to obey the order 27-15 is guilty of contempt of court. 27-16 (b) If any person intentionally or knowingly refuses to make 27-17 available any books, papers, records, or memorandums for 27-18 examination by the comptroller or wilfully refuses to attend and 27-19 testify, pursuant to the powers conferred on the comptroller by 27-20 Chapter 111, on application of the comptroller, a judge in the 27-21 court of appropriate jurisdiction for the county where the person 27-22 resides may by order direct the person to comply with the 27-23 comptroller's request for books, papers, records, or memorandums or 27-24 for the person's attendance and testimony. If the books, papers, 27-25 records, or memorandums required by the comptroller are in the 27-26 custody of a corporation, the order of the court may be directed to 27-27 any principal officer of the corporation. A person who fails or 28-1 refuses to obey the order is guilty of contempt of court. 28-2 Sec. 261.654. Transferees. (a) The liability, at law or in 28-3 equity, of a transferee of property of a taxpayer for any tax, 28-4 addition to tax, penalty, or interest due under this chapter, is 28-5 assessed, paid, and collected in the same manner and subject to the 28-6 same provisions and limitations as in the case of the tax to which 28-7 the liability relates except as otherwise provided in this section. 28-8 "Transferee" includes an heir or a recipient of a donation, legacy, 28-9 devise, or distribution. 28-10 (b) The period of limitation for assessment of liability of 28-11 a transferee is: 28-12 (1) one year after the expiration of the period of 28-13 limitation against the initial transferor if the transferee is the 28-14 initial transferee; 28-15 (2) one year after the expiration of the period of 28-16 limitation against the preceding transferee, but not more than 28-17 three years after the expiration of the period of limitation for 28-18 assessment against the initial transferor if the transferee is not 28-19 the initial transferee; or 28-20 (3) notwithstanding Subdivisions (1) and (2), if 28-21 before the expiration of the period of limitation under Subdivision 28-22 (1) or (2) a proceeding for the collection of the liability has 28-23 been begun against the initial transferor or the last preceding 28-24 transferee, respectively, one year after the proceeding is 28-25 terminated. 28-26 (c) If, before the expiration of the period of limitation 28-27 applicable to a transferee, the comptroller and the transferee 29-1 consent in writing to an assessment after that time, the liability 29-2 may be assessed at any time before the expiration of the agreed 29-3 period. The period of limitation on credit or refund to the 29-4 transferee of overpayments of tax made by the transferee or of 29-5 overpayments of tax made by the transferor of which the transferee 29-6 is legally entitled to credit or refund is extended by an agreement 29-7 under this subsection and any extension of the agreement. 29-8 (d) If a person dies, the period of limitation for 29-9 assessment against that person is the period that would be in 29-10 effect had death not occurred. 29-11 Sec. 261.655. Jeopardy Determinations. (a) If the 29-12 comptroller issues a jeopardy determination for a tax for a current 29-13 period, the comptroller shall terminate the tax period of the 29-14 taxpayer immediately, and the notice and demand for a return and 29-15 immediate payment of the tax shall apply to the terminated period 29-16 and to income accrued and deductions incurred on or before 29-17 termination date if not otherwise properly includable or deductible 29-18 for the period. 29-19 (b) The comptroller may abate the jeopardy determination if 29-20 he finds that jeopardy does not exist. 29-21 Sec. 261.656. Bankruptcy or Receivership. (a) On the 29-22 adjudication of bankruptcy of any taxpayer in any bankruptcy 29-23 proceeding or the appointment of a receiver for any taxpayer in any 29-24 receivership proceeding before any court of the United States or 29-25 any state or territory, any deficiency, together with additions to 29-26 tax and interest provided by law, determined by the comptroller may 29-27 be immediately assessed. 30-1 (b) Claims for the deficiency and additions to tax and 30-2 interest may be presented, for adjudication in accordance with law, 30-3 to the court before which the bankruptcy or receivership proceeding 30-4 is pending, despite the pendency of a protest before the 30-5 comptroller under Section 261.603. A protest against a proposed 30-6 assessment may not be filed with the comptroller after the 30-7 adjudication of bankruptcy or appointment of the receiver. 30-8 Sec. 261.657. EVIDENCE OF RELATED FEDERAL DETERMINATION. 30-9 Evidence of a federal determination relating to issues raised in a 30-10 proceeding under Section 261.603 is admissible in an administrative 30-11 or judicial proceeding relating to taxes imposed by this chapter. 30-12 (Sections 261.658-261.670 reserved for expansion 30-13 SUBCHAPTER K. OFFENSES 30-14 Sec. 261.671. Attempt to Evade or Defeat Tax. (a) A person 30-15 commits an offense if the person intentionally or knowingly 30-16 attempts in any manner to evade or defeat a tax imposed by this 30-17 chapter or the payment of tax imposed by this chapter. 30-18 (b) An offense under this section is a felony of the third 30-19 degree. 30-20 Sec. 261.672. Failure to Collect or Pay Over. (a) A person 30-21 commits an offense if the person is required under this chapter to 30-22 collect, truthfully account for, and pay over a tax imposed by this 30-23 chapter and the person intentionally or knowingly fails to collect 30-24 or truthfully account for and pay over the tax. 30-25 (b) An offense under this section is a felony of the third 30-26 degree. 30-27 Sec. 261.673. Failure to File Return, Supply Information, or 31-1 Pay Tax. (a) A person commits an offense if the person is 31-2 required under this chapter to pay a tax, or required by this 31-3 chapter or rule adopted under this chapter to make a return, to 31-4 keep records, or to supply information, and the person 31-5 intentionally or knowingly fails to pay the tax, make the return, 31-6 keep the records, or supply the information, at the time or times 31-7 required by law. 31-8 (b) An offense under this section is a Class A misdemeanor. 31-9 (Sections 261.674-261.680 reserved for expansion 31-10 SUBCHAPTER L. POWERS OF COMPTROLLER 31-11 Sec. 261.681. Cooperation with Other Jurisdictions. The 31-12 comptroller may permit the United States secretary of the treasury 31-13 or the secretary's delegate, or the proper officer of any state or 31-14 other jurisdiction imposing an income tax on the incomes of 31-15 individuals, or the authorized representative of either officer, to 31-16 inspect the income tax returns of an individual, or may furnish to 31-17 the officer or authorized representative an abstract of the return 31-18 of income of an individual or supply the officer with information 31-19 concerning an item of income contained in a return, or disclosed by 31-20 the report of an investigation of the income or return of income of 31-21 an individual, but permission may be granted only if the statutes 31-22 of the United States or of the other jurisdiction, as applicable, 31-23 grant substantially similar privileges to the comptroller. 31-24 Sec. 261.682. Cooperation with Other Tax Officials of This 31-25 State. The comptroller may permit other tax officials of this 31-26 state to inspect tax returns and reports filed under this chapter 31-27 but the inspection shall be permitted only for purposes of 32-1 enforcing a tax law and only to the extent and under the conditions 32-2 prescribed by rule of the comptroller. 32-3 Sec. 261.683. Contract with Secretary of Treasury for 32-4 Collection of Tax. The comptroller may enter into an agreement 32-5 with the United States secretary of the treasury or the secretary's 32-6 delegate, under which, to the extent provided by the terms of the 32-7 agreement, the secretary or delegate will administer, enforce, and 32-8 collect a tax imposed by this chapter on behalf of this state. The 32-9 cost of the services performed by the secretary or delegate in 32-10 administering, enforcing, or collecting the tax under the terms of 32-11 the agreement may be paid from the appropriations for the general 32-12 operations of the comptroller. 32-13 Sec. 261.684. Armed Forces Relief Provisions. (a) The 32-14 period of service in the armed forces of the United States in a 32-15 combat zone plus a period of continuous hospitalization outside 32-16 this state attributable to that service plus the next 180 days 32-17 shall be disregarded in determining, under rules of the 32-18 comptroller, whether an act required by this chapter was performed 32-19 by a taxpayer or the taxpayer's representative within the time 32-20 prescribed. 32-21 (b) In the case of an individual who dies during an 32-22 induction period while in active service as a member of the armed 32-23 forces of the United States, if the death occurred while the 32-24 individual was serving in a combat zone or as a result of wounds, 32-25 disease, or injury incurred while so serving, the tax imposed by 32-26 this chapter does not apply to the tax year in which the individual 32-27 dies or to any prior tax year ending on or after the first day the 33-1 individual so served in a combat zone. 33-2 Sec. 261.685. Disposition of Proceeds. The revenue from the 33-3 tax imposed by this chapter shall be deposited to the credit of the 33-4 general revenue fund. 33-5 SECTION 2. Section 111.201, Tax Code, is amended to read as 33-6 follows: 33-7 Sec. 111.201. ASSESSMENT LIMITATION. (a) No tax imposed by 33-8 this title may be assessed after four years from the date that the 33-9 tax becomes due and payable except as provided by Subsection (b) of 33-10 this section. 33-11 (b) A tax imposed by Chapter 261 may not be assessed after 33-12 six years from the date the tax becomes due and payable. 33-13 SECTION 3. A referendum as required by Section 24, Article 33-14 VIII, Texas Constitution, on the adoption of the income tax under 33-15 this Act shall be submitted to the voters at an election to be held 33-16 November 4, 1997. The ballot for the referendum shall be printed 33-17 to permit voting for or against the proposition: "The adoption of 33-18 an income tax at a rate of four percent on individuals with net 33-19 incomes greater than $89,500." 33-20 SECTION 4. (a) If either the proposition in Section 3 of 33-21 this Act is approved or the constitutional amendment proposed by 33-22 ____.J.R. No.____, 75th Legislature, Regular Session, 1997, takes 33-23 effect, this Act takes effect January 1, 1998. 33-24 (b) If the proposition in Section 3 of this Act is not 33-25 approved and the constitutional amendment proposed by ____.J.R. 33-26 No.____, 75th Legislature, Regular Session, 1997, does not take 33-27 effect, this Act has no effect. 34-1 SECTION 5. (a) Except as provided by Subsection (b) of this 34-2 section, this Act applies to income earned, accrued, or received on 34-3 or after the effective date of this Act. 34-4 (b) Income, deductions, losses, credits against income, or 34-5 other adjustment allowed in determining the amount of tax under 34-6 this Act or the amount of federal adjusted gross income under this 34-7 Act, including carryovers, are not prohibited in computing the 34-8 taxes for a tax period beginning on January 1, 1998, because those 34-9 adjustments may have accrued or otherwise originated before the 34-10 effective date of this Act. 34-11 (c) In 1998, the comptroller by rule may suspend the 34-12 application of Section 261.507, Tax Code, in whole or in part, and 34-13 may extend the deadlines for estimated tax payments under that 34-14 section. 34-15 SECTION 6. The importance of this legislation and the 34-16 crowded condition of the calendars in both houses create an 34-17 emergency and an imperative public necessity that the 34-18 constitutional rule requiring bills to be read on three several 34-19 days in each house be suspended, and this rule is hereby suspended.