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A BILL TO BE ENTITLED
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AN ACT
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relating to the E-Z computation and rate of the franchise tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.1016, Tax Code, is transferred to |
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Subchapter C, Chapter 171, Tax Code, and amended to read as follows: |
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Sec. 171.1016. E-Z COMPUTATION AND RATE. (a) |
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Notwithstanding any other provision of this chapter, a taxable |
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entity whose total revenue from its entire business is not more than |
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$10 million may elect to pay the tax imposed under this chapter in |
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the amount computed and at the rate provided by this section rather |
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than in the amount computed and at the tax rate provided by Section |
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171.002. |
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(b) The amount of the tax for which a taxable entity that |
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elects to pay the tax as provided by this section is liable is |
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computed by: |
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(1) determining the taxable entity's total revenue |
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from its entire business, as determined under Section 171.1011; |
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(2) apportioning the amount computed under |
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Subdivision (1) to this state, as provided by Section 171.106, to |
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determine the taxable entity's apportioned total revenue; [and] |
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(3) subtracting the amount of federal income taxes the |
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taxable entity paid during the period on which the report is based |
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from the apportioned total revenue computed under Subdivision (2); |
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(4) subtracting $1 million from [multiplying] the |
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amount computed under Subdivision (3); and |
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(5) applying to the difference computed under |
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Subdivision (4) the appropriate tax rate, as follows: |
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(A) subject to Subsection (c), if the difference |
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is $1 million or less, the tax rate is 0.25 percent of the |
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difference; or |
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(B) if the difference is more than $1 million, |
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the tax rate is $2,500 plus 0.5 percent of the amount of the |
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difference that exceeds $1 million. |
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(c) A taxable entity is not required to pay any tax and is |
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not considered to owe any tax for a period if the amount computed |
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under Subsection (b)(4) is zero or less [(2) by the rate of 0.575
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percent]. |
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(d) [(c)] A taxable entity that elects to pay the tax as |
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provided by this section may not take a credit, deduction, or other |
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adjustment that is not specifically authorized by this section. |
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[(d) Section 171.0021 applies to a taxable entity that
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elects to pay the tax as provided by this section.] |
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(e) A reference in this chapter or other law to the rate of |
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the franchise tax means, as appropriate, the rate under Section |
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171.002 or, for a taxable entity that elects to pay the tax as |
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provided by this section, the rate under this section. |
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SECTION 2. Section 171.204(b), Tax Code, is amended to read |
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as follows: |
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(b) The comptroller may require a taxable entity that does |
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not owe any tax because of the application of Section 171.002(d)(2) |
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to file an abbreviated information report with the comptroller |
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stating the amount of the taxable entity's total revenue from its |
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entire business. The comptroller may require a taxable entity that |
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does not owe any tax because of the application of Section |
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171.1016(c) to file an abbreviated information report with the |
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comptroller stating the amount computed under Section |
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171.1016(b)(3). The comptroller may not require a taxable entity |
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described by this subsection to file an information report that |
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requires the taxable entity to report or compute its margin. |
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SECTION 3. The changes in law made by this Act apply only to |
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a report originally due on or after the effective date of this Act. |
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SECTION 4. This Act takes effect January 1, 2012. |