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AN ACT
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rel |
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ating to the computation and rates of the franchise tax; |
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decreasing tax rates. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. (a) This Act shall be known as the Franchise Tax |
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Reduction Act of 2015. |
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(b) The legislature finds that the tax imposed by Chapter |
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171, Tax Code, has not provided sufficient reliability for property |
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tax relief. It is the intent of the legislature to promote economic |
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growth by repealing the franchise tax. |
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SECTION 2. Sections 171.002(a) and (b), Tax Code, are |
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amended to read as follows: |
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(a) Subject to Sections 171.003 and 171.1016 and except as |
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provided by Subsection (b), the rate of the franchise tax is 0.75 |
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[one] percent of taxable margin. |
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(b) Subject to Sections 171.003 and 171.1016, the rate of |
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the franchise tax is 0.375 [0.5] percent of taxable margin for those |
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taxable entities primarily engaged in retail or wholesale trade. |
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SECTION 3. Sections 171.1016(a) and (b), Tax Code, are |
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amended to read as follows: |
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(a) Notwithstanding any other provision of this chapter, a |
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taxable entity whose total revenue from its entire business is not |
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more than $20 [$10] million may elect to pay the tax imposed under |
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this chapter in the amount computed and at the rate provided by this |
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section rather than in the amount computed and at the tax rate |
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provided by Section 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) multiplying the amount computed under Subdivision |
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(2) by the rate of 0.331 [0.575] percent. |
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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. The comptroller of public accounts shall conduct |
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a comprehensive study, no later than September 30, 2016, to |
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identify the effects of economic growth on future state revenues. |
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The results of the study shall be reported to the governor and the |
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Legislative Budget Board. The report should identify revenue |
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growth allocation options to promote efficiency and sustainability |
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in meeting the revenue needs of this state, including revenues |
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allocated by Section 171.4011, Tax Code, upon repeal of the |
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franchise tax. |
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SECTION 6. This Act takes effect January 1, 2016. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 32 was passed by the House on April |
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29, 2015, by the following vote: Yeas 115, Nays 29, 1 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 32 on May 28, 2015, by the following vote: Yeas 133, Nays 10, 1 |
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present, not voting, and that the House adopted H.C.R. No. 143 |
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authorizing certain corrections in H.B. No. 32 on May 31, 2015, by |
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the following vote: Yeas 144, Nays 0, 2 present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 32 was passed by the Senate, with |
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amendments, on May 24, 2015, by the following vote: Yeas 24, Nays |
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6, and that the Senate adopted H.C.R. No. 143 authorizing certain |
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corrections in H.B. No. 32 on May 31, 2015, by the following vote: |
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Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |