| By: Thompson | H.B. No. 2593 | |
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| relating to the definition of a taxable entity. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Chapter 171, Subsection 171.0002, Tax Code, is | ||
| amended by adding Subsection 171.0002(c)(9) to read as follows: | ||
| (c) "Taxable entity" does not include an entity that is: | ||
| (1) a grantor trust as defined by Sections 671 and | ||
| 7701(a)(30)(E), Internal Revenue Code, all of the grantors and | ||
| beneficiaries of which are natural persons or charitable entities | ||
| as described in Section 501(c)(3), Internal Revenue Code, excluding | ||
| a trust taxable as a business entity pursuant to Treasury | ||
| Regulation Section 301.7701-4(b); | ||
| (2) an estate of a natural person as defined by Section | ||
| 7701(a)(30)(D), Internal Revenue Code, excluding an estate taxable | ||
| as a business entity pursuant to Treasury Regulation Section | ||
| 301.7701-4(b); | ||
| (3) an escrow; | ||
| (4) a real estate investment trust (REIT) as defined | ||
| by Section 856, Internal Revenue Code, and its "qualified REIT | ||
| subsidiary" entities as defined by Section 856(i)(2), Internal | ||
| Revenue Code, provided that: | ||
| (A) a REIT with any amount of its assets in direct | ||
| holdings of real estate, other than real estate it occupies for | ||
| business purposes, as opposed to holding interests in limited | ||
| partnerships or other entities that directly hold the real estate, | ||
| is a taxable entity; and | ||
| (B) a limited partnership or other entity that | ||
| directly holds the real estate as described in Paragraph (A) is not | ||
| exempt under this subdivision, without regard to whether a REIT | ||
| holds an interest in it; | ||
| (5) a real estate mortgage investment conduit (REMIC), | ||
| as defined by Section 860D, Internal Revenue Code; | ||
| (6) a nonprofit self-insurance trust created under | ||
| Chapter 2212, Insurance Code, or a predecessor statute; | ||
| (7) a trust qualified under Section 401(a), Internal | ||
| Revenue Code; [ |
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| (8) a trust or other entity that is exempt under | ||
| Section 501(c)(9), Internal Revenue Code[ |
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| (9) A Subchapter S Corporation under Section 1361, | ||
| Internal Revenue Code, that is 100 percent owned by an Employee | ||
| Stock Ownership Plan defined by Section 4975(e)(7), Internal | ||
| Revenue Code. | ||
| SECTION 2. This Act takes effect September 1, 2009. | ||