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78R4937 DAK-D
By: Grusendorf H.B. No. 976
A BILL TO BE ENTITLED
AN ACT
relating to exempting certain purchases of machinery and equipment
used for research or development from sales and use taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.3182 to read as follows:
Sec. 151.3182. EQUIPMENT USED IN RESEARCH OR DEVELOPMENT.
(a) In this section, "manufacturing" has the meaning assigned by
Section 151.318.
(b) There are exempted from the taxes imposed by this
chapter machinery, equipment, and replacement parts that are used
directly in the research or development of inventions, products,
processes, or technology by a person that is primarily engaged in:
(1) the manufacturing, processing, or fabrication of
tangible personal property for ultimate sale; or
(2) the performance of scientific or technical
services for a person described by Subdivision (1).
(c) The exemption does not include:
(1) office equipment or supplies; or
(2) equipment or supplies used in sales or
distribution activities or in transportation activities.
(d) The exemption provided by Subsection (b) takes effect
January 1, 2010. Until that date, a person is entitled to a credit
or refund of a portion of the taxes paid under this chapter on an
item that, after January 1, 2010, will be exempted from the taxes
imposed by this chapter under Subsection (b). The amount of the
credit or refund is determined as follows:
(1) for an item for which the taxable event occurs on
or after January 1, 2006, and before January 1, 2007, the taxpayer
is entitled to a refund or credit in an amount equal to 20 percent of
the tax paid on the item;
(2) for an item for which the taxable event occurs on
or after January 1, 2007, and before January 1, 2008, the taxpayer
is entitled to a refund or credit in an amount equal to 40 percent of
the tax paid on the item;
(3) for an item for which the taxable event occurs on
or after January 1, 2008, and before January 1, 2009, the taxpayer
is entitled to a refund or credit in an amount equal to 60 percent of
the tax paid on the item; and
(4) for an item for which the taxable event occurs on
or after January 1, 2009, and before January 1, 2010, the taxpayer
is entitled to a refund or credit in an amount equal to 80 percent of
the tax paid on the item.
(e) A taxpayer entitled to a credit or refund under
Subsection (d) may elect to receive either a credit or a refund. A
taxpayer who elects to receive a credit must claim the credit on the
return for a period that ends not later than the first anniversary
of the date on which the taxable event occurred. A taxpayer who
elects to receive a refund must apply to the comptroller for the
refund before or during the calendar year following the year in
which the tax on the item was paid.
SECTION 2. (a) This Act takes effect January 1, 2006.
(b) The change in law made by this Act does not affect taxes
imposed before the effective date of this Act, and the law in effect
before the effective date of this Act is continued in effect for
purposes of the liability for and collection of those taxes.