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A BILL TO BE ENTITLED
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AN ACT
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relating to the exclusion of certain payments from total revenue |
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for purposes of the franchise tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.1011, Tax Code, is amended by |
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amending Subsection (g) and adding Subsection (g-9) to read as |
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follows: |
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(g) A taxable entity shall exclude from its total revenue, |
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to the extent included under Subsection (c)(1)(A), (c)(2)(A), or |
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(c)(3), [only] the following flow-through funds that are mandated |
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by contract or subcontract to be distributed to other entities: |
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(1) sales commissions to nonemployees, including |
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split-fee real estate commissions; and |
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(2) the tax basis as determined under the Internal |
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Revenue Code of securities underwritten[; and
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[(3)
subcontracting payments made under a contract or
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subcontract entered into by the taxable entity to provide services,
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labor, or materials in connection with the actual or proposed
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design, construction, remodeling, remediation, or repair of
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improvements on real property or the location of the boundaries of
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real property]. |
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(g-9) A taxable entity shall exclude from its total revenue, |
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to the extent included under Subsection (c)(1)(A), (c)(2)(A), or |
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(c)(3), subcontracting payments made under a contract or |
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subcontract entered into by the taxable entity to provide services, |
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labor, or materials in connection with the actual or proposed |
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design, construction, remodeling, remediation, or repair of |
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improvements on real property or the location of the boundaries of |
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real property. A taxable entity is not required to segregate money |
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in order to qualify for the exclusion under this subsection. |
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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. |