By Goolsby, Oliveira, Culberson, et al. H.B. No. 551
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to exempting certain small corporations from the franchise
1-3 tax and to the reporting requirements for those corporations.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1
1-6 SECTION 1.01. Section 171.002(d), Tax Code, is amended to
1-7 read as follows:
1-8 (d) A [If the amount of tax computed for a corporation is
1-9 less than $100, the] corporation is not required to pay any tax
1-10 [that amount] and is not considered to owe any tax for a [that]
1-11 period if:
1-12 (1) the amount of tax computed for the corporation is
1-13 less than $100; or
1-14 (2) the amount of the corporation's gross receipts:
1-15 (A) from its entire business under Section
1-16 171.105 is less than $250,000; and
1-17 (B) from its entire business under Section
1-18 171.1051, including the amount excepted under Section 171.1051(a),
1-19 is less than $250,000.
1-20 SECTION 1.02. Section 171.203(a), Tax Code, is amended to
1-21 read as follows:
1-22 (a) A corporation on which the franchise tax is imposed,
1-23 regardless of whether the corporation is required to pay any tax,
1-24 shall file a report with the comptroller containing:
2-1 (1) the name of each corporation in which the
2-2 corporation filing the report owns a 10 percent or greater interest
2-3 and the percentage owned by the corporation;
2-4 (2) the name of each corporation that owns a 10
2-5 percent or greater interest in the corporation filing the report;
2-6 (3) the name, title, and mailing address of each
2-7 person who is an officer or director of the corporation on the date
2-8 the report is filed and the expiration date of each person's term
2-9 as an officer or director, if any;
2-10 (4) the name and address of the agent of the
2-11 corporation designated under Section 171.354 of this code; and
2-12 (5) the address of the corporation's principal office
2-13 and principal place of business.
2-14 SECTION 1.03. Section 171.204, Tax Code, is amended to read
2-15 as follows:
2-16 Sec. 171.204. INFORMATION REPORT. (a) Except as provided
2-17 by Subsection (b), to [To] determine eligibility for the exemption
2-18 provided by Section 171.2022, or to determine the amount of the
2-19 franchise tax or the correctness of a franchise tax report, the
2-20 comptroller may require an officer of a corporation that may be
2-21 subject to the tax imposed under this chapter to file an
2-22 information report with the comptroller stating the amount of the
2-23 corporation's taxable capital and earned surplus, or any other
2-24 information the comptroller may request.
2-25 (b) The comptroller may require an officer of a corporation
2-26 that does not owe any tax because of the application of Section
2-27 171.002(d)(2) to file an abbreviated information report with the
3-1 comptroller stating the amount of the corporation's gross receipts
3-2 from its entire business. The comptroller may not require a
3-3 corporation described by this subsection to file an information
3-4 report that requires the corporation to report or compute its
3-5 earned surplus or taxable capital.
3-6 SECTION 1.04. (a) This Article takes effect January 1,
3-7 2000, and applies to a report originally due on or after that
3-8 date.
3-9 (b) The change in law made by this Article does not affect
3-10 taxes imposed before the effective date of this Article, and the
3-11 law in effect before that date is continued in effect for purposes
3-12 of the liability for and collection of those taxes.
3-13 ARTICLE 2
3-14 SECTION 2.01. Section 171.002(d), Tax Code, is amended to
3-15 read as follows:
3-16 (d) If the amount of tax computed for a corporation is less
3-17 than $100, the corporation is not required to pay that amount and
3-18 is not considered to owe any tax for that period.
3-19 SECTION 2.02. Section 171.204, Tax Code, is amended to read
3-20 as follows:
3-21 Sec. 171.204. INFORMATION REPORT. To determine eligibility
3-22 for the exemption provided by Section 171.2022, or to determine the
3-23 amount of the franchise tax or the correctness of a franchise tax
3-24 report, the comptroller may require an officer of a corporation
3-25 that may be subject to the tax imposed under this chapter to file
3-26 an information report with the comptroller stating the amount of
3-27 the corporation's taxable capital and earned surplus, or any other
4-1 information the comptroller may request.
4-2 SECTION 2.03. (a) This Article takes effect January 1,
4-3 2006, and applies to a report originally due on or after that date.
4-4 (b) The change in law made by this Article does not affect
4-5 taxes imposed before the effective date of this Article, and the
4-6 law in effect before that date is continued in effect for purposes
4-7 of the liability for and collection of those taxes.
4-8 ARTICLE 3
4-9 SECTION 3.01. (a) Before the beginning of the 79th
4-10 Legislature, Regular Session, the comptroller of public accounts
4-11 shall report to the legislature and the governor on the effect that
4-12 exempting small corporations from the franchise tax under Section
4-13 171.002, Tax Code, as amended by this Act, and limiting the
4-14 reporting requirements of those corporations have on the economy of
4-15 this state, including on the creation of new jobs in this state.
4-16 (b) The report must include:
4-17 (1) an assessment of the intended purposes of the
4-18 changes in law and whether the changes are achieving those
4-19 objectives;
4-20 (2) an assessment of whether the changes in law have
4-21 created any problems in the administration of the franchise tax;
4-22 and
4-23 (3) a recommendation for retaining, eliminating, or
4-24 amending the changes.
4-25 (c) The comptroller of public accounts may include the
4-26 report in any other report made to the legislature.
4-27 SECTION 3.02. The importance of this legislation and the
5-1 crowded condition of the calendars in both houses create an
5-2 emergency and an imperative public necessity that the
5-3 constitutional rule requiring bills to be read on three several
5-4 days in each house be suspended, and this rule is hereby suspended.