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A BILL TO BE ENTITLED
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AN ACT
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relating to a deduction under the franchise tax for certain |
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contracts with the federal government. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.101(a), Tax Code, is amended to read |
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as follows: |
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(a) The taxable margin of a taxable entity is computed by: |
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(1) determining the taxable entity's margin, which is |
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the lesser of: |
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(A) 70 percent of the taxable entity's total |
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revenue from its entire business, as determined under Section |
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171.1011; or |
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(B) an amount computed by: |
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(i) determining the taxable entity's total |
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revenue from its entire business, under Section 171.1011; |
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(ii) subtracting, at the election of the |
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taxable entity, either: |
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(a) cost of goods sold, as determined |
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under Section 171.1012; or |
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(b) compensation, as determined under |
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Section 171.1013; [and] |
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(iii) subtracting costs not already |
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subtracted under Subparagraph (ii)(a) or (b) that are properly |
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allocable under the Federal Acquisition Regulation (48 C.F.R. |
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Chapter 1, or a successor regulation), to contracts, or |
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subcontracts supporting those contracts, for the sale of goods or |
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services to the federal government; and |
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(iv) subtracting, in addition to any |
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subtractions made under Subparagraph (ii)(a) or (b), compensation, |
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as determined under Section 171.1013, paid to an individual during |
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the period the individual is serving on active duty as a member of |
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the armed forces of the United States if the individual is a |
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resident of this state at the time the individual is ordered to |
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active duty and the cost of training a replacement for the |
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individual; |
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(2) apportioning the taxable entity's margin to this |
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state as provided by Section 171.106 to determine the taxable |
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entity's apportioned margin; and |
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(3) subtracting from the amount computed under |
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Subdivision (2) any other allowable deductions to determine the |
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taxable entity's taxable margin. |
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SECTION 2. This Act applies only to a report originally due |
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on or after January 1, 2014. |
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SECTION 3. This Act takes effect January 1, 2014. |