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A BILL TO BE ENTITLED
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AN ACT
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relating to the imposition of the franchise tax on certain combined |
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groups. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 171.0001(1) and (7), Tax Code, are |
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amended to read as follows: |
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(1) "Affiliated group" means: |
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(A) a group of one or more entities in which a |
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controlling interest is owned by a common owner or owners, either |
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corporate or noncorporate, or by one or more of the member entities; |
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or |
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(B) a group that is composed of one or more |
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entities in which an equal interest is owned by all owners, |
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corporate or noncorporate, or by all member entities, but only if |
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none of the owners or member entities have more than 50 employees. |
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(7) "Combined group" means taxable entities that are |
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part of an affiliated group engaged in a unitary business and that |
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are required or permitted to file a group report under Section |
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171.1014. |
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SECTION 2. Section 171.1014, Tax Code, is amended by |
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amending Subsection (a) and adding Subsections (a-1) and (a-2) to |
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read as follows: |
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(a) Except as provided by Subsection (a-1), taxable |
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[Taxable] entities that are part of an affiliated group engaged in a |
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unitary business shall file a combined group report in lieu of |
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individual reports based on the combined group's business. |
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(a-1) Taxable entities that are part of an affiliated group |
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described by Section 171.0001(1)(B) that is engaged in a unitary |
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business may elect to file a combined report in lieu of individual |
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reports based on the combined group's business. |
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(a-2) A [The] combined group may not include a taxable |
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entity that conducts business outside the United States if 80 |
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percent or more of the taxable entity's property and payroll, as |
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determined by factoring under Chapter 141, are assigned to |
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locations outside the United States. In applying Chapter 141, if |
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either the property factor or the payroll factor is zero, the |
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denominator is one. The combined group may not include a taxable |
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entity that conducts business outside the United States and has no |
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property or payroll if 80 percent or more of the taxable entity's |
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gross receipts, as determined under Sections 171.103, 171.105, and |
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171.1055, are assigned to locations outside the United States. |
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SECTION 3. This Act applies only to a report originally due |
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on or after the effective date of this Act. |
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SECTION 4. This Act takes effect January 1, 2010. |