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A BILL TO BE ENTITLED
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AN ACT
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relating to the franchise tax of certain nonqualified affiliates. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. (a) Section 171.1014, Tax Code, is amended by |
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adding Subsection (j) to read as follows: |
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(j)(1) Notwithstanding any other provision of this |
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chapter, a nonqualified affiliate that would, except as otherwise |
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provided by this Subsection (j)(1), be included in a combined group |
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with a qualified affiliate may not be included in such combined |
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group if: |
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(A) greater than 50 percent of the threshold |
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amount is from activities in retail or wholesale trade; |
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(B) less than 50 percent of the threshold amount |
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is from the sale of products produced by any entity that is included |
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in an affiliated group with such qualified affiliate; and |
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(C) less than 5 percent of the threshold amount |
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is from providing retail or wholesale electric utilities. |
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(2) For purposes of this Section: |
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(A) a nonqualified affiliate is an individual |
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taxable entity that provides retail or wholesale electric |
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utilities; |
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(B) a qualified affiliate is an individual |
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taxable entity that does not provide retail or wholesale electric |
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utilities; and |
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(C) the threshold amount is the total revenue |
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that would be determined under Subsection (c), provided that |
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Subsection (j)(1) does not apply to the determination of total |
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revenue for purposes of this Subsection (j)(2)(C). |
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(b) This section applies only to a report originally due on |
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or after January 1, 2014. |
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SECTION 2. This Act takes effect September 1, 2013. |