| |
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A BILL TO BE ENTITLED
|
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|
AN ACT
|
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relating to the imposition of an income tax on income that exceeds |
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$100,000 to provide property tax relief and fund public education; |
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providing penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 2, Tax Code, is amended by adding Subtitle |
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L to read as follows: |
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SUBTITLE L. PERSONAL INCOME TAX |
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CHAPTER 261. PERSONAL INCOME TAX |
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SUBCHAPTER A. IMPOSITION OF TAX |
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Sec. 261.001. TAX IMPOSED. (a) A tax is imposed for each |
|
|
tax year: |
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(1) on the taxable income that exceeds $100,000 of |
|
|
every resident of this state; and |
|
|
(2) on the taxable income that exceeds $100,000 |
|
|
derived from sources in this state of every nonresident. |
|
|
(b) The tax rates for an individual are: |
|
|
(1) for taxable income that exceeds $100,000 but does |
|
|
not exceed $150,000, two percent of the taxable income; |
|
|
(2) for taxable income that exceeds $150,000 but does |
|
|
not exceed $250,000, $1,000 plus three percent of the taxable |
|
|
income that exceeds $150,000 but does not exceed $250,000; |
|
|
(3) for taxable income that exceeds $250,000 but does |
|
|
not exceed $500,000, $4,000 plus four percent of the taxable income |
|
|
that exceeds $250,000 but does not exceed $500,000; |
|
|
(4) for taxable income that exceeds $500,000 but does |
|
|
not exceed $1 million, $14,000 plus five percent of the taxable |
|
|
income that exceeds $500,000 but does not exceed $1 million; and |
|
|
(5) for taxable income that exceeds $1 million, |
|
|
$39,000 plus six percent of the taxable income that exceeds $1 |
|
|
million. |
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Sec. 261.002. JOINT RETURN. If persons subject to the tax |
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|
under this chapter file a joint federal income tax return with a |
|
|
spouse, they may file a joint return under this chapter but they may |
|
|
not combine their incomes for the purpose of determining the amount |
|
|
of tax owed. The separate incomes of each spouse are taxed as |
|
|
individual incomes under Section 261.001. |
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|
Sec. 261.003. MEANING OF TERMS. (a) In this chapter: |
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|
(1) an individual is a resident of this state if the |
|
|
individual: |
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|
(A) is domiciled in this state, unless the |
|
|
individual does not maintain a permanent abode in this state and |
|
|
does maintain a permanent abode elsewhere and spends, in the |
|
|
aggregate, not more than 30 days of the tax year in this state; or |
|
|
(B) is not domiciled in this state but maintains |
|
|
a permanent abode in this state and spends, in the aggregate, more |
|
|
than 183 days of the tax year in this state; and |
|
|
(2) an individual is a nonresident if the individual |
|
|
is not a resident of this state. |
|
|
(b) Any term used in this chapter and not defined by or for |
|
|
purposes of this chapter has the same meaning as when used in a |
|
|
comparable context in the laws of the United States relating to |
|
|
federal income taxes, unless a different meaning is clearly |
|
|
required. Any reference in this chapter to federal law means the |
|
|
provisions of the Internal Revenue Code of 1986 in effect on |
|
|
December 31, 2007, and other provisions of federal laws relating to |
|
|
federal income taxes in effect on December 31, 2007. |
|
|
[Sections 261.004-261.050 reserved for expansion] |
|
|
SUBCHAPTER B. COMPUTATION OF TAXABLE INCOME |
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|
Sec. 261.051. TAXABLE INCOME. The taxable income of a |
|
|
resident of this state is the resident's federal adjusted gross |
|
|
income as defined by federal law. |
|
|
Sec. 261.052. CREDIT FOR INCOME TAX PAID TO ANOTHER STATE. |
|
|
(a) A resident individual is allowed a credit against the tax |
|
|
otherwise due under this chapter for the amount of any income tax |
|
|
imposed on the individual for the tax year by another state of the |
|
|
United States on income that is derived from sources in that state |
|
|
and that is subject to tax under this chapter. |
|
|
(b) The credit provided by this section may not exceed the |
|
|
proportion of the tax otherwise due under this chapter that the |
|
|
amount of the taxpayer's adjusted gross income derived from sources |
|
|
in the other taxing jurisdiction bears to the taxpayer's entire |
|
|
adjusted gross income as modified by this subchapter. |
|
|
Sec. 261.053. DUAL RESIDENCE; REDUCTION OF TAX. If a |
|
|
taxpayer is a resident of this state and is regarded as a resident |
|
|
of another jurisdiction for purposes of personal income taxation, |
|
|
the comptroller shall reduce the tax on that portion of the |
|
|
taxpayer's income that is subject to tax in both jurisdictions |
|
|
solely by virtue of dual residence. The reduction is an amount |
|
|
equal to that portion of the lower of the two taxes applicable to |
|
|
the income taxed twice that the tax imposed by this state bears to |
|
|
the combined taxes of the two jurisdictions on the income taxed |
|
|
twice. |
|
|
Sec. 261.054. NONRESIDENT INDIVIDUALS--TAXABLE INCOME. |
|
|
The taxable income of a nonresident individual is that part of the |
|
|
individual's federal adjusted gross income derived from sources in |
|
|
this state determined under Section 261.055. |
|
|
Sec. 261.055. ADJUSTED GROSS INCOME FROM SOURCES IN THIS |
|
|
STATE--NONRESIDENT. (a) The adjusted gross income of a |
|
|
nonresident derived from sources in this state is the net amount of |
|
|
items of income, gain, loss, and deduction entering into the |
|
|
nonresident's federal adjusted gross income that are derived from |
|
|
or connected with sources in this state, including: |
|
|
(1) the nonresident's distributive share of |
|
|
partnership income and deductions determined under Section |
|
|
261.403; and |
|
|
(2) the nonresident's share of estate or trust income |
|
|
and deductions derived from sources in this state. |
|
|
(b) Items of income, gain, loss, and deduction derived from |
|
|
or connected with sources in this state are those items |
|
|
attributable to: |
|
|
(1) the ownership or disposition of an interest in |
|
|
real or tangible personal property in this state; and |
|
|
(2) a business, trade, profession, or occupation |
|
|
conducted in this state. |
|
|
(c) Income from intangible personal property, including |
|
|
annuities, dividends, interest, and gains from the disposition of |
|
|
intangible personal property, constitutes income derived from |
|
|
sources in this state only to the extent that the income is from |
|
|
property used in a business, trade, profession, or occupation |
|
|
carried on in this state. |
|
|
(d) Deductions for capital losses, net long-term capital |
|
|
gains, and net operating losses derived from or connected with |
|
|
sources in this state, are determined in the same manner as the |
|
|
corresponding federal deductions. However, the extent to which the |
|
|
deductions are derived from or connected with sources in this state |
|
|
is determined under the comptroller's rules. |
|
|
(e) For a nonresident individual who is a shareholder of a |
|
|
corporation that is an electing small business corporation for |
|
|
federal income tax purposes, the undistributed taxable income of |
|
|
the corporation does not constitute income derived from sources in |
|
|
this state and a net operating loss of the corporation does not |
|
|
constitute a loss or deduction connected with sources in this |
|
|
state. |
|
|
(f) If a business, trade, profession, or occupation is |
|
|
carried on partly in and partly outside this state, the items of |
|
|
income and deduction derived from or connected with sources in this |
|
|
state are determined by apportionment and allocation consistent |
|
|
with Chapter 141 under the comptroller's rules. |
|
|
(g) Compensation paid by the United States for service in |
|
|
the armed forces of the United States performed by a nonresident is |
|
|
not income derived from sources in this state. |
|
|
[Sections 261.056-261.100 reserved for expansion] |
|
|
SUBCHAPTER C. [RESERVED] |
|
|
[Sections 261.101-261.200 reserved for expansion] |
|
|
SUBCHAPTER D. ACCOUNTING PERIODS AND METHODS |
|
|
Sec. 261.201. PERIOD FOR COMPUTATION OF TAXABLE INCOME. |
|
|
(a) For purposes of the tax imposed by this chapter, a taxpayer's |
|
|
tax year is the same as the taxpayer's tax year for federal income |
|
|
tax purposes. |
|
|
(b) If a taxpayer's tax year is changed for federal income |
|
|
tax purposes, the taxpayer's tax year for purposes of the tax |
|
|
imposed by this chapter shall be similarly changed. |
|
|
Sec. 261.202. METHODS OF ACCOUNTING. (a) A taxpayer's |
|
|
method of accounting is the same as the taxpayer's method of |
|
|
accounting for federal income tax purposes. If a single method of |
|
|
accounting has not been regularly used by the taxpayer, taxable |
|
|
income for purposes of this chapter shall be computed under any |
|
|
method that in the opinion of the comptroller fairly reflects |
|
|
income. |
|
|
(b) If a taxpayer's method of accounting is changed for |
|
|
federal income tax purposes, the taxpayer's method of accounting |
|
|
for purposes of this chapter is changed in the same manner. |
|
|
Sec. 261.203. ADJUSTMENTS. In computing a taxpayer's |
|
|
taxable income for any tax year under a method of accounting |
|
|
different from the method under which the taxpayer's taxable income |
|
|
for the previous year was computed, there shall be taken into |
|
|
account those adjustments that are determined, under rules |
|
|
prescribed by the comptroller, to be necessary solely by reason of |
|
|
the change in order to prevent amounts from being duplicated or |
|
|
omitted. |
|
|
Sec. 261.204. LIMITATION ON ADDITIONAL TAX. (a) If a |
|
|
taxpayer's method of accounting is changed, other than from an |
|
|
accrual to an installment method, an additional tax that results |
|
|
from adjustments determined to be necessary solely because of the |
|
|
change may not be greater than if those adjustments were ratably |
|
|
allocated and included for the tax year of the change and not more |
|
|
than two preceding tax years during which the taxpayer used the |
|
|
method of accounting from which the change is made. |
|
|
(b) If a taxpayer's method of accounting is changed from an |
|
|
accrual to an installment method, an additional tax for the year of |
|
|
the change of method and for a subsequent year that is attributable |
|
|
to the receipt of installment payments properly accrued in a prior |
|
|
year shall be reduced by the portion of tax for any prior tax year |
|
|
attributable to the accrual of the installment payments, under |
|
|
rules adopted by the comptroller. |
|
|
[Sections 261.205-261.400 reserved for expansion] |
|
|
SUBCHAPTER E. PARTNERS AND PARTNERSHIPS |
|
|
Sec. 261.401. ENTITY NOT TAXABLE. A partnership as an |
|
|
entity is not subject to the tax imposed by this chapter. Persons |
|
|
carrying on business as partners are liable for the tax imposed by |
|
|
this chapter only in their separate or individual capacities. |
|
|
Sec. 261.402. RESIDENT PARTNER--ADJUSTED GROSS INCOME. (a) |
|
|
Partnership income, gain, loss, or deduction is allocated in |
|
|
accordance with each partner's distributive share for federal |
|
|
income tax purposes. |
|
|
(b) Each item of partnership income, gain, loss, or |
|
|
deduction has the same character for a partner under this chapter as |
|
|
it has for federal income tax purposes. If an item is not |
|
|
characterized for federal income tax purposes, it has the same |
|
|
character for a partner as if realized directly from the source from |
|
|
which realized by the partnership or incurred in the same manner as |
|
|
incurred by the partnership. |
|
|
(c) If a partner's distributive share of an item of |
|
|
partnership income, gain, loss, or deduction is determined for |
|
|
federal income tax purposes by a special provision in the |
|
|
partnership agreement with respect to the item, and the principal |
|
|
purpose of the provision is the avoidance or evasion of tax under |
|
|
this chapter, the partner's distributive share of the item and a |
|
|
modification required with respect to it is determined in |
|
|
accordance with the partner's distributive share of the taxable |
|
|
income or loss of the partnership generally, excluding those items |
|
|
requiring separate computation under Section 702, Internal Revenue |
|
|
Code of 1986. |
|
|
Sec. 261.403. NONRESIDENT PARTNER--ADJUSTED GROSS INCOME |
|
|
FROM SOURCES IN THIS STATE. (a) In determining the adjusted gross |
|
|
income of a nonresident partner of any partnership, there shall be |
|
|
included only that part derived from or connected with sources in |
|
|
this state of the partner's distributive share of items of |
|
|
partnership income, gain, loss, and deduction entering into the |
|
|
partner's federal adjusted gross income, as that part is determined |
|
|
under rules adopted by the comptroller and consistent with the |
|
|
rules adopted under Section 261.055. |
|
|
(b) Except as authorized by Subsection (c), in determining |
|
|
the sources of a nonresident partner's income, no effect is given to |
|
|
a provision in the partnership agreement that: |
|
|
(1) characterizes payments to the partner as being for |
|
|
services or for the use of capital, or allocates to the partner, as |
|
|
income or gain from sources outside this state, a greater |
|
|
proportion of the partner's distributive share of partnership |
|
|
income or gain than the ratio of partnership income or gain from |
|
|
sources outside this state to partnership income or gain from all |
|
|
sources; or |
|
|
(2) allocates to the partner a greater proportion of a |
|
|
partnership item of loss or deduction connected with sources in |
|
|
this state than the partner's proportionate share, for federal |
|
|
income tax purposes, of partnership loss or deduction generally. |
|
|
(c) The comptroller may, on application, authorize the use |
|
|
of other methods of determining a nonresident partner's portion of |
|
|
partnership items derived from or connected with sources in this |
|
|
state, and the modifications related to it, that are appropriate |
|
|
and equitable, on terms the comptroller may require. |
|
|
(d) A nonresident partner's distributive share of items of |
|
|
income, gain, loss, or deduction is determined under Section |
|
|
261.402(a). The character of partnership items for a nonresident |
|
|
partner is determined under Section 261.402(b). The effect of a |
|
|
special provision in a partnership agreement, other than a |
|
|
provision described by Subsection (b), having as a principal |
|
|
purpose the avoidance or evasion of tax under this chapter is |
|
|
determined under Section 261.402(c). |
|
|
[Sections 261.404-261.500 reserved for expansion] |
|
|
SUBCHAPTER F. TAX RETURNS AND PAYMENTS |
|
|
Sec. 261.501. PERSONS REQUIRED TO MAKE RETURNS OF INCOME. A |
|
|
state income tax return shall be made by every individual who has |
|
|
adjusted gross income from sources in this state in excess of |
|
|
$100,000. |
|
|
Sec. 261.502. RETURNS BY FIDUCIARIES. (a) An income tax |
|
|
return for a deceased individual shall be made and filed by the |
|
|
executor, administrator, or other person charged with the care of |
|
|
the property of the decedent. A final return of a decedent is due |
|
|
when it would have been due if the decedent had not died. |
|
|
(b) An income tax return for an individual who is unable to |
|
|
make a return because of minority or other disability shall be made |
|
|
and filed by the individual's authorized agent, guardian, |
|
|
conservator, fiduciary, or other person charged with the care of |
|
|
the individual or the individual's property other than a receiver |
|
|
in possession of only a part of the individual's property. |
|
|
(c) If two or more fiduciaries are acting jointly, the |
|
|
return may be made by any one of them. |
|
|
Sec. 261.503. NOTICE OF QUALIFICATION AS RECEIVER. A |
|
|
receiver, trustee in bankruptcy, assignee for benefit of creditors, |
|
|
or other similar fiduciary shall give notice of the person's |
|
|
qualification to the comptroller, as may be required by rule. |
|
|
Sec. 261.504. CHANGE OF STATUS AS RESIDENT OR NONRESIDENT |
|
|
DURING YEAR. (a) If the status of an individual changes during the |
|
|
individual's tax year from resident to nonresident or from |
|
|
nonresident to resident, the comptroller by rule may require the |
|
|
individual to file one return for the portion of the year during |
|
|
which the individual is a resident and one for the portion of the |
|
|
year during which the individual is a nonresident. |
|
|
(b) Except as provided by Subsection (c), the taxable income |
|
|
of an individual is determined as provided by Section 261.051 for |
|
|
residents and Section 261.054 for nonresidents as if the |
|
|
individual's tax year for federal income tax purposes were limited |
|
|
to the period of the individual's resident and nonresident status |
|
|
respectively. |
|
|
(c) There shall be included in determining taxable income |
|
|
from sources in or outside this state, as the case may be, income, |
|
|
gain, loss, or deduction accrued prior to the change of status even |
|
|
though not otherwise includable or allowable in respect to the |
|
|
period before the change, but the taxation or deduction of items |
|
|
accrued before the change of status is not affected by the change. |
|
|
(d) If two returns are required to be filed under this |
|
|
section, the total of the taxes due may not be less than would be due |
|
|
if the total of the taxable incomes reported on the two returns were |
|
|
includable in one return. |
|
|
Sec. 261.505. TIME AND PLACE FOR FILING RETURNS AND PAYING |
|
|
TAX. The income tax return required by this chapter shall be filed |
|
|
not later than the 15th day of the fourth month following the end of |
|
|
the taxpayer's tax year. A person required to make and file a |
|
|
return under this chapter shall pay a tax due to the comptroller not |
|
|
later than the last day that the filing of the return is allowed |
|
|
without penalty, excluding an extension of time for filing the |
|
|
return. The comptroller by rule shall prescribe the place for |
|
|
filing a return, statement, or other document required by this |
|
|
chapter and for the payment of a tax. |
|
|
Sec. 261.506. ESTIMATED TAX. (a) An individual subject to |
|
|
the income tax imposed by this chapter shall make estimated |
|
|
payments of the tax. Section 6654, Internal Revenue Code of 1986, |
|
|
other than Subsections (a), (b), (d)(2), and (e) of that section, |
|
|
governing the payment of estimated federal income taxes on |
|
|
individuals applies to the payments required by this section, |
|
|
including exemptions from the estimated tax payment requirement. A |
|
|
reference in that section to the federal income tax imposed on |
|
|
individuals is construed as a reference to the tax imposed by this |
|
|
chapter as required to administer this section. A power or duty |
|
|
given by Section 6654, Internal Revenue Code of 1986, to the United |
|
|
States secretary of the treasury is assigned to the comptroller for |
|
|
purposes of the estimated payments required by this section. |
|
|
(b) The comptroller shall adopt rules to administer this |
|
|
section. |
|
|
(c) Payment of the estimated tax or an installment is |
|
|
considered payment on account of the tax imposed by this chapter. |
|
|
Sec. 261.507. EXTENSION OF TIME FOR FILING AND PAYMENT. (a) |
|
|
The comptroller, on terms the comptroller may require, may grant a |
|
|
reasonable extension of time for payment of tax or an installment, |
|
|
or for filing a return, statement, or other document required under |
|
|
this chapter. Except for an extension for a taxpayer who is outside |
|
|
the United States, an extension for filing a return, statement, or |
|
|
document may not exceed six months. |
|
|
(b) If the time for the payment of an amount of tax is |
|
|
extended, the comptroller may require the taxpayer to furnish a |
|
|
bond or other security in an amount not exceeding twice the amount |
|
|
of tax for which the extension of time for payment is granted, on |
|
|
terms the comptroller may require. |
|
|
Sec. 261.508. CHANGE OF ELECTION. An election expressly |
|
|
authorized by this chapter may be changed as authorized by the |
|
|
comptroller or by the comptroller's rule. |
|
|
Sec. 261.509. SIGNING OF RETURNS AND OTHER DOCUMENTS. (a) |
|
|
A return, statement, or other document required to be made or filed |
|
|
under this chapter shall be signed as provided by the comptroller. |
|
|
An individual's name signed to a return, statement, or other |
|
|
document is prima facie evidence that the individual signed the |
|
|
return, statement, or other document. |
|
|
(b) A return, statement, or other document required of a |
|
|
partnership must be signed by at least one partner. A partner's |
|
|
name signed to a return, statement, or other document is prima facie |
|
|
evidence that the partner is authorized to sign on behalf of the |
|
|
partnership. |
|
|
(c) The making or filing of a return, statement, or other |
|
|
document or copy required to be made or filed under this chapter, |
|
|
including a copy of a federal return, constitutes a certification |
|
|
by the person making or filing the return, statement, or other |
|
|
document or copy that the statements contained in it are true and |
|
|
that a copy filed is a true copy. |
|
|
[Sections 261.510-261.520 reserved for expansion] |
|
|
SUBCHAPTER G. INFORMATION RETURNS |
|
|
Sec. 261.521. GENERAL REQUIREMENTS. The comptroller by |
|
|
rule may require the keeping of records, the content and form of |
|
|
returns and statements, and the filing of copies of federal income |
|
|
returns and determinations. The comptroller may require a person, |
|
|
by rule or by notice served on the person, to make returns, render |
|
|
statements, or keep records, as the comptroller considers |
|
|
sufficient to show whether the person is liable under this chapter |
|
|
for tax or for the collection of tax. |
|
|
Sec. 261.522. REPORT OF CHANGE IN FEDERAL TAXABLE INCOME. |
|
|
(a) If the amount of a taxpayer's federal taxable income reported |
|
|
on the taxpayer's federal income tax return for a tax year is |
|
|
changed or corrected by the United States Internal Revenue Service |
|
|
or other competent authority, or as the result of a renegotiation of |
|
|
a contract or subcontract with the United States, the taxpayer |
|
|
shall: |
|
|
(1) report the change or correction in federal taxable |
|
|
income not later than the 90th day after the final determination of |
|
|
the change, correction, or renegotiation, or as required by the |
|
|
comptroller; and |
|
|
(2) concede the accuracy of the determination or state |
|
|
in what way it is erroneous. |
|
|
(b) A taxpayer filing an amended federal income tax return |
|
|
shall also file, not later than the 90th day after filing, an |
|
|
amended return under this chapter, and shall give any information |
|
|
required by the comptroller. |
|
|
(c) The comptroller by rule may prescribe exceptions to the |
|
|
requirements of this section. |
|
|
[Sections 261.523-261.600 reserved for expansion] |
|
|
SUBCHAPTER H. ADDITIONS TO TAX; PENALTIES |
|
|
Sec. 261.601. FAILURE TO FILE TAX RETURN. (a) A person who |
|
|
does not file a return required under this chapter on or before the |
|
|
prescribed date is subject to the following penalty based on a |
|
|
percentage of the full amount of tax owed on the prescribed day: |
|
|
(1) if the return is filed not later than the 30th day |
|
|
after the prescribed date, five percent; |
|
|
(2) if the return is filed later than the 30th day |
|
|
after the prescribed date, but not later than the 60th day after the |
|
|
prescribed date, 10 percent; |
|
|
(3) if the return is filed later than the 60th day |
|
|
after the prescribed date, but not later than the 90th day after the |
|
|
prescribed date, 15 percent; |
|
|
(4) if the return is filed later than the 90th day |
|
|
after the prescribed date, but not later than the 120th day after |
|
|
the prescribed date, 20 percent; or |
|
|
(5) if the return is filed later than the 120th day |
|
|
after the prescribed date, 25 percent. |
|
|
(b) The prescribed date is determined with regard to an |
|
|
extension of time for filing. |
|
|
(c) In determining the amount owed on the prescribed date, |
|
|
the taxpayer is entitled to credit for a portion of the tax paid on |
|
|
or before the prescribed date and other credit that may be claimed |
|
|
on the return. |
|
|
(d) The penalty required by this section does not apply if |
|
|
the taxpayer shows that the failure to file a return was not the |
|
|
result of wilful neglect before the prescribed date or at any time |
|
|
during the delinquency and that good cause for the failure existed |
|
|
at all times before filing. |
|
|
Sec. 261.602. FAILURE TO PAY TAX. (a) A person who does not |
|
|
pay any amount of tax owed by the person on the prescribed date |
|
|
shall pay, in addition to all other penalties and interest, a |
|
|
penalty of 10 percent of the amount of the tax due and owing on the |
|
|
prescribed date. |
|
|
(b) The prescribed date is determined with regard to |
|
|
extensions of time allowed by the comptroller. |
|
|
(c) A failure to pay all or part of an estimated tax is |
|
|
considered to be an underpayment of estimated tax. The comptroller |
|
|
by rule shall prescribe the method of determining the amount and |
|
|
period of underpayment. |
|
|
Sec. 261.603. PENALTIES AND INTEREST TREATED AS TAX. The |
|
|
penalties and interest provided by this subchapter shall be paid on |
|
|
notice and demand and shall be assessed, collected, and paid in the |
|
|
same manner as other taxes. The comptroller may issue a deficiency |
|
|
notice for all or part of a penalty or interest along with or |
|
|
separate from the amount of tax owed in absence of penalties or |
|
|
interest. |
|
|
[Sections 261.604-261.630 reserved for expansion] |
|
|
SUBCHAPTER I. CREDITS AND REFUNDS |
|
|
Sec. 261.631. CREDITS AND REFUNDS. (a) Within the |
|
|
applicable period of limitations the comptroller may credit an |
|
|
overpayment of income tax and interest on the overpayment against a |
|
|
liability of a tax imposed by the tax laws of this state on the |
|
|
person who made the overpayment, and the balance shall be refunded |
|
|
by the comptroller out of the proceeds of the tax retained by the |
|
|
comptroller. |
|
|
(b) The comptroller may prescribe rules providing for |
|
|
crediting against the estimated tax for a tax year the amount |
|
|
determined to be an overpayment of the income tax for a preceding |
|
|
tax year. |
|
|
(c) If an amount of income tax is assessed and collected |
|
|
after the expiration of the period of limitations properly |
|
|
applicable, the amount is an overpayment. |
|
|
Sec. 261.632. ABATEMENTS. (a) The comptroller may abate |
|
|
any unpaid portion of a tax or a tax liability that is excessive in |
|
|
amount, assessed after the expiration of the applicable period of |
|
|
limitations, or erroneously or illegally assessed. |
|
|
(b) The comptroller may abate the unpaid portion of a tax or |
|
|
a tax liability if the comptroller determines under uniform rules |
|
|
prescribed by the comptroller that the administration and |
|
|
collection costs involved would not warrant collection of the |
|
|
amount due. |
|
|
Sec. 261.633. EXTENDED LIMITATION PERIOD. (a) If a |
|
|
taxpayer is required by Section 261.522 to report a change or |
|
|
correction in federal taxable income reported on a federal income |
|
|
tax return, or to report a change or correction that is treated in |
|
|
the same manner as if it were an overpayment for federal income tax |
|
|
purposes, or to file an amended return with the comptroller, a claim |
|
|
for credit or refund of a resulting overpayment of tax must be filed |
|
|
by the taxpayer not later than the second anniversary of the date |
|
|
the notice of the change or correction or the amended return was |
|
|
required to be filed with the comptroller. If the report or amended |
|
|
return required by Section 261.522 is not filed within the period |
|
|
prescribed by that section, interest on a resulting refund or |
|
|
credit ceases to accrue after the period. The amount of credit or |
|
|
refund may not exceed the amount of the reduction in tax |
|
|
attributable to the federal change, correction, or items amended on |
|
|
the taxpayer's amended federal income tax return. This subsection |
|
|
does not affect the time within which or the amount for which a |
|
|
claim for credit or refund may be filed under a provision other than |
|
|
this section. |
|
|
(b) If a claim for credit or refund relates to an |
|
|
overpayment of tax on account of the deductibility by the taxpayer |
|
|
of a debt as a debt that became worthless or a loss from |
|
|
worthlessness of a security or the effect that the deductibility of |
|
|
a debt or of a loss has on the application to the taxpayer of a |
|
|
carryover, the claim may be made, under rules adopted by the |
|
|
comptroller, not later than the seventh anniversary of the date |
|
|
prescribed by law for filing the return for the year with respect to |
|
|
which the claim is made. |
|
|
(c) If a claim for credit or refund relates to an |
|
|
overpayment attributable to a net operating loss carryback, the |
|
|
claim may be made, under rules adopted by the comptroller, not later |
|
|
than the 15th day of the 40th month following the end of the tax year |
|
|
of the net operating loss that resulted in the carryback or the |
|
|
period prescribed by Section 111.104, whichever expires later. |
|
|
[Sections 261.634-261.650 reserved for expansion] |
|
|
SUBCHAPTER J. MISCELLANEOUS ENFORCEMENT PROVISIONS |
|
|
Sec. 261.651. TAXPAYER NOT RESIDENT. If notice and demand |
|
|
for the payment of a tax is given to a nonresident and it appears to |
|
|
the comptroller that it is not practicable to locate property of the |
|
|
taxpayer sufficient in amount to cover the amount of tax due, the |
|
|
comptroller may authorize the institution of any available action |
|
|
or proceeding to collect or enforce the claim in any place by any |
|
|
procedure by which a civil judgment of a court of record of this |
|
|
state could be collected or enforced. The comptroller may |
|
|
designate agents or retain counsel outside this state for the |
|
|
purpose of collecting taxes due under this chapter and require of |
|
|
them bonds or other security for the faithful performance of their |
|
|
duties. The comptroller may enter into agreements with the tax |
|
|
department of another state for the collection of taxes from |
|
|
persons found in this state who are delinquent in the payment of |
|
|
income taxes imposed by that state on condition that the agreeing |
|
|
state afford similar assistance in the collection of taxes from |
|
|
persons found in that state who are delinquent in the payment of |
|
|
taxes imposed by this chapter. |
|
|
Sec. 261.652. INCOME TAX CLAIMS OF OTHER STATES. The courts |
|
|
of this state shall recognize and enforce liabilities for personal |
|
|
income taxes lawfully imposed by another state that extends a like |
|
|
comity to this state, and the authorized officer of the other state |
|
|
may sue for the collection of personal income tax in the courts of |
|
|
this state. A certificate by the secretary of state of the other |
|
|
state that an officer suing for the collection of the tax is |
|
|
authorized to collect the tax is conclusive proof of the officer's |
|
|
authority. For the purposes of this section, "taxes" includes |
|
|
additions to tax, interest, and penalties. |
|
|
Sec. 261.653. ORDER TO COMPEL COMPLIANCE. (a) On |
|
|
application of the attorney general, a judge of a court of |
|
|
appropriate jurisdiction for the county in which a taxpayer or |
|
|
other person who intentionally or knowingly refuses to file a tax |
|
|
return required by this chapter may, by order, direct the person to |
|
|
file the return. A person who fails or refuses to obey the order is |
|
|
guilty of contempt of court. |
|
|
(b) If any person intentionally or knowingly refuses to make |
|
|
available any books, papers, records, or memorandums for |
|
|
examination by the comptroller or wilfully refuses to attend and |
|
|
testify, in accordance with the powers conferred on the comptroller |
|
|
by Chapter 111, on application of the comptroller, a judge in the |
|
|
court of appropriate jurisdiction for the county where the person |
|
|
resides may by order direct the person to comply with the |
|
|
comptroller's request for books, papers, records, or memorandums or |
|
|
for the person's attendance and testimony. If the books, papers, |
|
|
records, or memorandums required by the comptroller are in the |
|
|
custody of a corporation, the order of the court may be directed to |
|
|
any principal officer of the corporation. A person who fails or |
|
|
refuses to obey the order is guilty of contempt of court. |
|
|
Sec. 261.654. TRANSFEREES. (a) The liability, at law or in |
|
|
equity, of a transferee of property of a taxpayer for any tax, |
|
|
addition to tax, penalty, or interest due under this chapter, is |
|
|
assessed, paid, and collected in the same manner and subject to the |
|
|
same provisions and limitations as in the case of the tax to which |
|
|
the liability relates except as otherwise provided by this section. |
|
|
"Transferee" includes an heir or a recipient of a donation, legacy, |
|
|
devise, or distribution. |
|
|
(b) The period of limitation for assessment of liability of |
|
|
a transferee is: |
|
|
(1) the first anniversary of the expiration of the |
|
|
period of limitation against the initial transferor if the |
|
|
transferee is the initial transferee; |
|
|
(2) the first anniversary of the expiration of the |
|
|
period of limitation against the preceding transferee, but not |
|
|
later than the third anniversary of the expiration of the period of |
|
|
limitation for assessment against the initial transferor, if the |
|
|
transferee is not the initial transferee; or |
|
|
(3) notwithstanding Subdivisions (1) and (2), if |
|
|
before the expiration of the period of limitation under Subdivision |
|
|
(1) or (2) a proceeding for the collection of the liability has been |
|
|
begun against the initial transferor or the last preceding |
|
|
transferee, respectively, the first anniversary of the date on |
|
|
which the proceeding is terminated. |
|
|
(c) If, before the expiration of the period of limitation |
|
|
applicable to a transferee, the comptroller and the transferee |
|
|
consent in writing to an assessment after that time, the liability |
|
|
may be assessed at any time before the expiration of the agreed |
|
|
period. The period of limitation on credit or refund to the |
|
|
transferee of overpayments of tax made by the transferee or of |
|
|
overpayments of tax made by the transferor of which the transferee |
|
|
is legally entitled to credit or refund is extended by an agreement |
|
|
under this subsection and any extension of the agreement. |
|
|
(d) If a person dies, the period of limitation for |
|
|
assessment against that person is the period that would be in effect |
|
|
had death not occurred. |
|
|
Sec. 261.655. JEOPARDY DETERMINATIONS. (a) If the |
|
|
comptroller issues a jeopardy determination for a tax for a current |
|
|
period, the comptroller shall terminate the tax period of the |
|
|
taxpayer immediately, and the notice and demand for a return and |
|
|
immediate payment of the tax shall apply to the terminated period |
|
|
and to income accrued and deductions incurred on or before the |
|
|
termination date if not otherwise properly includable or deductible |
|
|
for the period. |
|
|
(b) The comptroller may abate the jeopardy determination if |
|
|
the comptroller finds that jeopardy does not exist. |
|
|
Sec. 261.656. BANKRUPTCY OR RECEIVERSHIP. (a) On the |
|
|
adjudication of bankruptcy of any taxpayer in any bankruptcy |
|
|
proceeding or the appointment of a receiver for any taxpayer in any |
|
|
receivership proceeding before any court of the United States or |
|
|
any state or territory, any deficiency, together with additions to |
|
|
tax and interest provided by law, determined by the comptroller may |
|
|
be immediately assessed. |
|
|
(b) Claims for the deficiency and additions to tax and |
|
|
interest may be presented, for adjudication in accordance with law, |
|
|
to the court before which the bankruptcy or receivership proceeding |
|
|
is pending, despite the pendency of any protest before the |
|
|
comptroller. A protest against a proposed assessment may not be |
|
|
filed with the comptroller after the adjudication of bankruptcy or |
|
|
appointment of the receiver. |
|
|
Sec. 261.657. EVIDENCE OF RELATED FEDERAL DETERMINATION. |
|
|
Evidence of a federal determination relevant to the taxes imposed |
|
|
by this chapter is admissible in an administrative or judicial |
|
|
proceeding relating to those taxes. |
|
|
[Sections 261.658-261.670 reserved for expansion] |
|
|
SUBCHAPTER K. OFFENSES |
|
|
Sec. 261.671. ATTEMPT TO EVADE OR DEFEAT TAX. (a) A person |
|
|
commits an offense if the person intentionally or knowingly |
|
|
attempts in any manner to evade or defeat a tax imposed by this |
|
|
chapter or the payment of tax imposed by this chapter. |
|
|
(b) An offense under this section is a felony of the third |
|
|
degree. |
|
|
Sec. 261.672. FAILURE TO PAY. (a) A person commits an |
|
|
offense if the person is required under this chapter to pay a tax |
|
|
imposed by this chapter and the person intentionally or knowingly |
|
|
fails to pay the tax. |
|
|
(b) An offense under this section is a felony of the third |
|
|
degree. |
|
|
Sec. 261.673. FAILURE TO FILE RETURN, SUPPLY INFORMATION, |
|
|
OR PAY TAX. (a) A person commits an offense if the person is |
|
|
required under this chapter to pay a tax, or required by this |
|
|
chapter or rule adopted under this chapter to make a return, to keep |
|
|
records, or to supply information, and the person intentionally or |
|
|
knowingly fails to pay the tax, make the return, keep the records, |
|
|
or supply the information at the time or times required by law. |
|
|
(b) An offense under this section is a Class A misdemeanor. |
|
|
[Sections 261.674-261.680 reserved for expansion] |
|
|
SUBCHAPTER L. POWERS OF COMPTROLLER |
|
|
Sec. 261.681. COOPERATION WITH OTHER JURISDICTIONS. The |
|
|
comptroller may permit the United States secretary of the treasury |
|
|
or the secretary's delegate, or the proper officer of any state or |
|
|
other jurisdiction imposing an income tax on the incomes of |
|
|
individuals, or the authorized representative of either officer, to |
|
|
inspect the income tax returns of an individual, or may furnish to |
|
|
the officer or authorized representative an abstract of the return |
|
|
of income of an individual or supply the officer with information |
|
|
concerning an item of income contained in a return, or disclosed by |
|
|
the report of an investigation of the income or return of income of |
|
|
an individual, but permission may be granted only if the statutes of |
|
|
the United States or of the other jurisdiction, as applicable, |
|
|
grant substantially similar privileges to the comptroller. |
|
|
Sec. 261.682. COOPERATION WITH OTHER TAX OFFICIALS OF THIS |
|
|
STATE. The comptroller may permit other tax officials of this state |
|
|
to inspect tax returns and reports filed under this chapter but the |
|
|
inspection is permitted only for purposes of enforcing a tax law and |
|
|
only to the extent and under the conditions prescribed by rule of |
|
|
the comptroller. |
|
|
Sec. 261.683. CONTRACT WITH SECRETARY OF TREASURY FOR |
|
|
COLLECTION OF TAX. The comptroller may enter into an agreement with |
|
|
the United States secretary of the treasury or the secretary's |
|
|
delegate under which, to the extent provided by the terms of the |
|
|
agreement, the secretary or delegate will administer, enforce, and |
|
|
collect a tax imposed by this chapter on behalf of this state. The |
|
|
cost of the services performed by the secretary or delegate in |
|
|
administering, enforcing, or collecting the tax under the terms of |
|
|
the agreement may be paid from the appropriations for the general |
|
|
operations of the comptroller. |
|
|
Sec. 261.684. ARMED FORCES RELIEF PROVISIONS. (a) The |
|
|
period of service in the armed forces of the United States in a |
|
|
combat zone plus a period of continuous hospitalization outside |
|
|
this state attributable to that service plus the next 180 days shall |
|
|
be disregarded in determining, under rules of the comptroller, |
|
|
whether an act required by this chapter was performed by a taxpayer |
|
|
or the taxpayer's representative within the time prescribed. |
|
|
(b) If an individual dies during an induction period while |
|
|
in active service as a member of the armed forces of the United |
|
|
States and the death occurred while the individual was serving in a |
|
|
combat zone or as a result of wounds, disease, or injury incurred |
|
|
while serving, the tax imposed by this chapter does not apply to the |
|
|
tax year in which the individual dies or to any prior tax year |
|
|
ending on or after the first day the individual so served in a |
|
|
combat zone. |
|
|
Sec. 261.685. DISPOSITION OF PROCEEDS. The revenue from |
|
|
the tax imposed by this chapter shall be deposited as follows: |
|
|
(1) two-thirds of the revenue shall be deposited to |
|
|
the credit of a special account in the general revenue fund and may |
|
|
be appropriated only for the purpose of reducing the rate of ad |
|
|
valorem maintenance and operations taxes levied for the support of |
|
|
primary and secondary education in the manner provided by Sections |
|
|
24(h) and (i), Article VIII, Texas Constitution, for the reduction |
|
|
of that rate; and |
|
|
(2) one-third to the credit of the foundation school |
|
|
fund. |
|
|
SECTION 2. Section 111.201, Tax Code, is amended to read as |
|
|
follows: |
|
|
Sec. 111.201. ASSESSMENT LIMITATION. (a) No tax imposed by |
|
|
this title may be assessed after four years from the date that the |
|
|
tax becomes due and payable except as provided by Subsection (b). |
|
|
(b) A tax imposed by Chapter 261 may not be assessed after |
|
|
six years from the date the tax becomes due and payable. |
|
|
SECTION 3. A referendum as required by Section 24, Article |
|
|
VIII, Texas Constitution, on the adoption of the income tax under |
|
|
this Act shall be submitted to the voters at an election to be held |
|
|
November 6, 2007. The ballot for the referendum shall be printed to |
|
|
permit voting for or against the proposition: "The adoption of an |
|
|
income tax at graduated rates of two percent to six percent for |
|
|
taxable income in excess of $100,000." |
|
|
SECTION 4. (a) Except as provided by Subsection (b) of this |
|
|
section, this Act applies to income earned, accrued, or received on |
|
|
or after the effective date of this Act. |
|
|
(b) Income, deductions, losses, credits against income, or |
|
|
other adjustments allowed in determining the amount of tax under |
|
|
this Act or the amount of federal adjusted gross income under this |
|
|
Act, including carryovers, are not prohibited in computing the |
|
|
taxes for a tax period beginning on January 1, 2008, because those |
|
|
adjustments may have accrued or otherwise originated before the |
|
|
effective date of this Act. |
|
|
(c) In 2008, the comptroller by rule may suspend the |
|
|
application of Section 261.506, Tax Code, as added by this Act, |
|
|
wholly or partly and may extend the deadlines for estimated tax |
|
|
payments under that section. |
|
|
SECTION 5. (a) Except as provided by Section 6 of this Act, |
|
|
if the proposition in Section 3 of this Act is approved, this Act |
|
|
takes effect January 1, 2008. |
|
|
(b) Except as provided by Section 6 of this Act, if the |
|
|
proposition in Section 3 of this Act is not approved, this Act has |
|
|
no effect. |
|
|
SECTION 6. Section 3 of this Act takes effect September 1, |
|
|
2007. |