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A BILL TO BE ENTITLED
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AN ACT
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relating to an exemption from the franchise tax for a limited period |
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following the relocation of a taxable entity to this state from |
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another state. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.0001(4), Tax Code, is amended to |
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read as follows: |
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(4) "Beginning date" means: |
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(A) for a taxable entity chartered or organized |
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in this state, the date on which the taxable entity's charter or |
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organization takes effect; and |
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(B) for any other taxable entity: |
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(i) [,] the date on which the taxable entity |
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begins doing business in this state; or |
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(ii) if the taxable entity concurrently |
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begins doing business in this state and relocates its main office or |
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other principal place of business to this state from another state, |
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the third anniversary of the date on which the taxable entity begins |
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doing business in this state. |
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SECTION 2. Section 171.001, Tax Code, is amended by adding |
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Subsection (d) to read as follows: |
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(d) Notwithstanding Subsection (a), the tax imposed under |
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this chapter is not imposed on a taxable entity that is chartered or |
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organized under the laws of the United States or another state and |
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that concurrently begins doing business in this state and relocates |
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its main office or other principal place of business to this state |
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from another state until the third anniversary of the date on which |
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the taxable entity begins doing business in this state. |
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SECTION 3. Section 171.063(g), Tax Code, is amended to read |
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as follows: |
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(g) If a corporation's federal tax exemption is withdrawn by |
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the Internal Revenue Service for failure of the corporation to |
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qualify or maintain its qualification for the exemption, the |
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corporation's exemption under this section ends on the effective |
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date of that withdrawal by the Internal Revenue Service. The |
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effective date of the withdrawal is considered the corporation's |
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beginning date for purposes of determining the corporation's |
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privilege periods and for all other purposes of this chapter, |
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except that if the corporation would have been subject to Section |
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171.001(d) or exempted from the franchise tax under Section 171.089 |
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in the absence of the federal tax exemption, and the effective date |
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of the withdrawal is a date earlier than the date the corporation |
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would have become subject to the franchise tax as provided by |
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Section 171.001(d) or Section 171.089, as applicable, the date the |
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corporation would have become subject to the franchise tax under |
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the applicable provision is considered the corporation's beginning |
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date for those purposes. |
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SECTION 4. Subchapter B, Chapter 171, Tax Code, is amended |
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by adding Section 171.089 to read as follows: |
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Sec. 171.089. EXEMPTION FOR LIMITED PERIOD: CERTAIN |
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ENTITIES RELOCATING TO TEXAS. (a) A taxable entity is exempted |
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from the franchise tax for a period of three years if the taxable |
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entity: |
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(1) is chartered or organized under the laws of the |
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United States or another state; |
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(2) has been doing business in this state; and |
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(3) had its main office or principal place of business |
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located in another state but relocates that main office or other |
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principal place of business to this state. |
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(b) The three-year period during which a taxable entity is |
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exempted from the franchise tax as provided by this section begins |
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on January 1 of the year following the date the relocation of the |
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main office or other principal place of business is completed, as |
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defined by comptroller rules, and ends on the third anniversary of |
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that date. |
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SECTION 5. Section 171.204, Tax Code, is amended by adding |
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Subsection (d) to read as follows: |
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(d) The comptroller may require a taxable entity on which |
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the tax imposed under this chapter is not imposed solely because of |
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the application of Section 171.001(d) to file an information report |
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stating the taxable entity's beginning date as determined under |
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Section 171.0001(4)(B)(ii). The comptroller may require a taxable |
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entity exempted from the franchise tax solely because of the |
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application of Section 171.089 to file an information report |
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stating the date the relocation of the taxable entity's main office |
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or other principal place of business was completed, as defined by |
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comptroller rules. The comptroller may require the report to |
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include other information the comptroller determines necessary, |
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except that the comptroller may not require the taxable entity to |
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report or compute its margin. |
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SECTION 6. (a) The change in law made by this Act applies to |
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a taxable entity doing business in this state before, on, or after |
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the effective date of this Act. |
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(b) A taxable entity on which the tax under Chapter 171, Tax |
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Code, was imposed before the effective date of this Act, but on |
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which the tax is not imposed on the effective date of this Act |
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because of the application of Section 171.001(d) or 171.089, Tax |
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Code, as added by this Act, is not entitled to a refund of or credit |
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for taxes paid under Chapter 171, Tax Code, before the effective |
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date of this Act. |
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SECTION 7. This Act takes effect January 1, 2014. |