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A BILL TO BE ENTITLED
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AN ACT
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relating to the exclusion of certain flow-through funds by taxable |
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entities in determining total revenue for purposes of the franchise |
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tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.0001(13-a), Tax Code, is amended to |
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read as follows: |
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(13-a) "Security," for purposes of Sections |
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[171.1011(g),] 171.1011(g-2)[,] and 171.106(f) only, has the |
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meaning assigned by Section 475(c)(2), Internal Revenue Code, and |
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includes instruments described by Sections 475(e)(2)(B), (C), and |
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(D) of that code. |
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SECTION 2. Sections 171.1011(f), (h), and (i), Tax Code, |
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are amended to read as follows: |
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(f) A taxable entity shall exclude from its total revenue, |
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to the extent included under Subsection (c)(1)(A), (c)(2)(A), or |
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(c)(3), flow-through funds that are mandated by law, contract, or |
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fiduciary duty to be distributed to other entities, including taxes |
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collected from a third party by the taxable entity and remitted by |
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the taxable entity to a taxing authority. |
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(h) If the taxable entity belongs to an affiliated group, |
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the taxable entity may not exclude payments described by Subsection |
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(f), [(g),] (g-1), (g-2), (g-3), or (g-4) that are made to entities |
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that are members of the affiliated group. |
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(i) A [Except as provided by Subsection (g), a] payment made |
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under an ordinary contract for the provision of services in the |
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regular course of business may not be excluded unless the payment |
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constitutes flow-through funds that may be excluded under |
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Subsection (f). |
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SECTION 3. Section 171.1011(g), Tax Code, is repealed. |
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SECTION 4. 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 5. This Act takes effect January 1, 2014. |