1-1 By: Goolsby, Oliveira, Culberson, et al. H.B. No. 551
1-2 (Senate Sponsor - Fraser)
1-3 (In the Senate - Received from the House May 10, 1999;
1-4 May 10, 1999, read first time and referred to Committee on Finance;
1-5 May 13, 1999, reported favorably by the following vote: Yeas 10,
1-6 Nays 0; May 13, 1999, sent to printer.)
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to exempting certain small corporations from the franchise
1-10 tax and to the reporting requirements for those corporations.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 ARTICLE 1
1-13 SECTION 1.01. Section 171.002(d), Tax Code, is amended to
1-14 read as follows:
1-15 (d) A [If the amount of tax computed for a corporation is
1-16 less than $100, the] corporation is not required to pay any tax
1-17 [that amount] and is not considered to owe any tax for a [that]
1-18 period if:
1-19 (1) the amount of tax computed for the corporation is
1-20 less than $100; or
1-21 (2) the amount of the corporation's gross receipts:
1-22 (A) from its entire business under Section
1-23 171.105 is less than $250,000; and
1-24 (B) from its entire business under Section
1-25 171.1051, including the amount excepted under Section 171.1051(a),
1-26 is less than $250,000.
1-27 SECTION 1.02. Section 171.203(a), Tax Code, is amended to
1-28 read as follows:
1-29 (a) A corporation on which the franchise tax is imposed,
1-30 regardless of whether the corporation is required to pay any tax,
1-31 shall file a report with the comptroller containing:
1-32 (1) the name of each corporation in which the
1-33 corporation filing the report owns a 10 percent or greater interest
1-34 and the percentage owned by the corporation;
1-35 (2) the name of each corporation that owns a 10
1-36 percent or greater interest in the corporation filing the report;
1-37 (3) the name, title, and mailing address of each
1-38 person who is an officer or director of the corporation on the date
1-39 the report is filed and the expiration date of each person's term
1-40 as an officer or director, if any;
1-41 (4) the name and address of the agent of the
1-42 corporation designated under Section 171.354 of this code; and
1-43 (5) the address of the corporation's principal office
1-44 and principal place of business.
1-45 SECTION 1.03. Section 171.204, Tax Code, is amended to read
1-46 as follows:
1-47 Sec. 171.204. INFORMATION REPORT. (a) Except as provided
1-48 by Subsection (b), to [To] determine eligibility for the exemption
1-49 provided by Section 171.2022, or to determine the amount of the
1-50 franchise tax or the correctness of a franchise tax report, the
1-51 comptroller may require an officer of a corporation that may be
1-52 subject to the tax imposed under this chapter to file an
1-53 information report with the comptroller stating the amount of the
1-54 corporation's taxable capital and earned surplus, or any other
1-55 information the comptroller may request.
1-56 (b) The comptroller may require an officer of a corporation
1-57 that does not owe any tax because of the application of Section
1-58 171.002(d)(2) to file an abbreviated information report with the
1-59 comptroller stating the amount of the corporation's gross receipts
1-60 from its entire business. The comptroller may not require a
1-61 corporation described by this subsection to file an information
1-62 report that requires the corporation to report or compute its
1-63 earned surplus or taxable capital.
1-64 SECTION 1.04. (a) This Article takes effect January 1,
2-1 2000, and applies to a report originally due on or after that
2-2 date.
2-3 (b) The change in law made by this Article does not affect
2-4 taxes imposed before the effective date of this Article, and the
2-5 law in effect before that date is continued in effect for purposes
2-6 of the liability for and collection of those taxes.
2-7 ARTICLE 2
2-8 SECTION 2.01. Section 171.002(d), Tax Code, is amended to
2-9 read as follows:
2-10 (d) If the amount of tax computed for a corporation is less
2-11 than $100, the corporation is not required to pay that amount and
2-12 is not considered to owe any tax for that period.
2-13 SECTION 2.02. Section 171.204, Tax Code, is amended to read
2-14 as follows:
2-15 Sec. 171.204. INFORMATION REPORT. To determine eligibility
2-16 for the exemption provided by Section 171.2022, or to determine the
2-17 amount of the franchise tax or the correctness of a franchise tax
2-18 report, the comptroller may require an officer of a corporation
2-19 that may be subject to the tax imposed under this chapter to file
2-20 an information report with the comptroller stating the amount of
2-21 the corporation's taxable capital and earned surplus, or any other
2-22 information the comptroller may request.
2-23 SECTION 2.03. (a) This Article takes effect January 1,
2-24 2006, and applies to a report originally due on or after that date.
2-25 (b) The change in law made by this Article does not affect
2-26 taxes imposed before the effective date of this Article, and the
2-27 law in effect before that date is continued in effect for purposes
2-28 of the liability for and collection of those taxes.
2-29 ARTICLE 3
2-30 SECTION 3.01. (a) Before the beginning of the 79th
2-31 Legislature, Regular Session, the comptroller of public accounts
2-32 shall report to the legislature and the governor on the effect that
2-33 exempting small corporations from the franchise tax under Section
2-34 171.002, Tax Code, as amended by this Act, and limiting the
2-35 reporting requirements of those corporations have on the economy of
2-36 this state, including on the creation of new jobs in this state.
2-37 (b) The report must include:
2-38 (1) an assessment of the intended purposes of the
2-39 changes in law and whether the changes are achieving those
2-40 objectives;
2-41 (2) an assessment of whether the changes in law have
2-42 created any problems in the administration of the franchise tax;
2-43 and
2-44 (3) a recommendation for retaining, eliminating, or
2-45 amending the changes.
2-46 (c) The comptroller of public accounts may include the
2-47 report in any other report made to the legislature.
2-48 SECTION 3.02. The importance of this legislation and the
2-49 crowded condition of the calendars in both houses create an
2-50 emergency and an imperative public necessity that the
2-51 constitutional rule requiring bills to be read on three several
2-52 days in each house be suspended, and this rule is hereby suspended.
2-53 * * * * *