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A BILL TO BE ENTITLED
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AN ACT
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relating to corrections to the revised franchise tax transition |
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provisions of House Bill No. 3, 79th Legislature, 3rd Called |
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Session, 2006. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 22, Chapter 1, Acts of the 79th |
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Legislature, 3rd Called Session, 2006, is amended by amending |
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Subsection (b) and adding Subsections (b-1), (b-2), and (g) to read |
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as follows: |
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(b) For an entity becoming subject to the franchise tax |
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under this Act: |
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(1) margin or gross receipts occurring before June 1, |
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2006, may not be considered for purposes of determining taxable |
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margin or for apportionment purposes; and |
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(2) an entity subject to the franchise tax on January |
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1, 2008, that was not previously subject to the tax and for which |
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January 1, 2008, is not the beginning date, shall file an annual |
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report due May 15, 2008, based on the period: |
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(A) if the entity has an accounting period that |
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ends on or after January 1, 2007, and before June 1, 2007: |
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(i) beginning on the later of: |
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(a) June 1, 2006; or |
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(b) the date the entity was organized |
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in this state or, if a foreign entity, the date it began doing |
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business in this state; and |
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(ii) ending on the date that accounting |
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period ends in 2007; |
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(B) if the entity has an accounting period that |
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ends on or after June 1, 2007, and before December 31, 2007: |
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(i) beginning on the date that accounting |
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period begins; and |
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(ii) ending on the date that accounting |
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period ends in 2007; and |
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(C) if the entity has an accounting period that |
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ends on December 31, 2007, or if the entity does not have an |
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accounting period that ends in 2007: |
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(i) beginning on the later of: |
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(a) January 1, 2007; or |
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(b) the date the entity was organized |
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in the state or, if a foreign entity, the date it began doing |
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business in this state; and |
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(ii) ending on December 31, 2007[; and
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[(3) an entity subject to the franchise tax as it
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existed before the effective date of this Act at any time after
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December 31, 2006, and before January 1, 2008, but not subject to
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the franchise tax on January 1, 2008, shall file a final report for
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the privilege of doing business at any time after June 30, 2007, and
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before January 1, 2008, based on the period:
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[(A)beginning on the later of:
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[(i)January 1, 2007; or
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[(ii) the date the entity was organized in
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this state or, if a foreign entity, the date it began doing business
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in this state; and
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[(B) ending on the date the entity became no
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longer subject to the franchise tax]. |
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(b-1) This subsection applies to an entity that: |
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(1) is not doing business in this state on January 1, |
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2008; |
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(2) would be subject to the franchise tax as amended by |
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this Act if it were doing business in this state on or after January |
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1, 2008, but would not have been subject to the franchise tax as it |
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existed before being amended by this Act; and |
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(3) was doing business in this state at any time after |
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June 30, 2007, and before January 1, 2008. |
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(b-2) An entity to which Subsection (b-1) applies shall, for |
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the privilege of doing business in this state at any time after June |
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30, 2007, and before January 1, 2008, file a final report and pay an |
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additional tax equal to the appropriate rate under Section 171.002, |
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Tax Code, as amended by this Act, of the entity's taxable margin |
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based on the period: |
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(1) beginning on the later of: |
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(A) January 1, 2007; or |
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(B) the date the entity was organized in this |
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state or, if a foreign entity, the date it began doing business in |
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this state; and |
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(2) ending on the date the entity became no longer |
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subject to the tax. |
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(g) Except as provided by Subsection (b)(1) of this section, |
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an entity becoming subject to the franchise tax under this Act that |
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is part of a combined group report shall, for purposes of |
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determining margin and apportionment, include its activity for the |
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same period used by the combined group. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |
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