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A BILL TO BE ENTITLED
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AN ACT
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relating to a franchise tax credit for wages paid to certain |
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employees by certain new businesses located in small |
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municipalities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 171, Tax Code, is amended by adding |
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Subchapter R to read as follows: |
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SUBCHAPTER R. TAX CREDIT FOR WAGES PAID BY CERTAIN |
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TAXABLE ENTITIES IN SMALL MUNICIPALITIES |
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Sec. 171.871. ENTITLEMENT TO CREDIT. A taxable entity is |
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entitled to a credit in the amount and under the conditions provided |
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by this subchapter against the tax imposed under this chapter. |
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Sec. 171.872. QUALIFICATION. A taxable entity qualifies |
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for a credit under this subchapter if the taxable entity: |
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(1) on or after September 1, 2015: |
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(A) is chartered or organized; and |
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(B) first begins doing business in this state in |
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a municipality with a population of less than 3,000; and |
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(2) is not substantially similar in ownership and |
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operation to another entity doing business in the municipality |
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described by Subdivision (1)(B) before the taxable entity was |
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chartered or organized. |
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Sec. 171.873. AMOUNT OF CREDIT. The amount of the credit is |
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50 percent of the wages paid by the taxable entity before the second |
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anniversary of the date the taxable entity first began doing |
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business in a municipality described by Section 171.872(1)(B) to |
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each employee who: |
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(1) begins employment with the taxable entity on or |
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after September 1, 2015, in a full-time employment position that is |
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located or based in that municipality; and |
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(2) is a resident of this state. |
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Sec. 171.874. APPLICATION FOR CREDIT. (a) A taxable entity |
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must apply for a credit under this subchapter on or with the tax |
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report for the period for which the credit is claimed. |
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(b) The comptroller shall promulgate a form for the |
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application for the credit. A taxable entity must use the form in |
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applying for the credit. |
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Sec. 171.875. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A |
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taxable entity may claim a credit under this subchapter for wages |
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paid during an accounting period only against the tax owed for the |
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corresponding privilege period. |
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SECTION 2. 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 3. This Act takes effect January 1, 2016. |