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A BILL TO BE ENTITLED
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AN ACT
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relating to the use of certain surplus state revenue, in certain |
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circumstances, to adjust franchise tax rates to phase out the |
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franchise tax and to the expiration of that tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. 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, 171.004, and 171.1016 and |
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except as provided by Subsection (b), the rate of the franchise tax |
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is 0.75 percent of taxable margin. |
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(b) Subject to Sections 171.003, 171.004, and 171.1016, the |
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rate of the franchise tax is 0.375 percent of taxable margin for |
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those taxable entities primarily engaged in retail or wholesale |
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trade. |
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SECTION 2. Subchapter A, Chapter 171, Tax Code, is amended |
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by adding Section 171.004 to read as follows: |
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Sec. 171.004. ADJUSTMENT OF TAX RATES. (a) As soon as |
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practical after September 1, but before December 15, of each |
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odd-numbered year, the comptroller shall determine: |
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(1) the ending balance of general revenue related |
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funds available for certification for the preceding state fiscal |
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biennium; and |
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(2) the tax rates for purposes of Sections 171.002(a) |
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and (b) and Section 171.1016 that, if applied beginning January 1 of |
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the next year, are estimated to yield an amount of revenue for the |
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state fiscal biennium in which the determination is made equal to |
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the lesser of: |
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(A) the ending balance determined under |
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Subdivision (1); or |
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(B) $3.5 billion. |
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(b) Not later than December 15 of each odd-numbered year, |
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the comptroller shall: |
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(1) determine the adjusted tax rates, which are the |
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tax rates under Sections 171.002(a) and (b) and Section 171.1016 in |
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effect on the date the comptroller makes the determination under |
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Subsection (a)(2) less the tax rates determined under Subsection |
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(a)(2); and |
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(2) except as provided by Subsection (e): |
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(A) adopt the adjusted tax rates determined under |
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Subdivision (1); |
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(B) publish notice of the adjusted tax rates in |
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the Texas Register; and |
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(C) provide any other notice relating to the |
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adjusted tax rates that the comptroller considers appropriate. |
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(c) In determining the tax rates under Subsection (a)(2) and |
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the adjusted tax rates under Subsection (b)(1), the comptroller |
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shall ensure that the adjusted tax rates reflect proportional |
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reductions to the tax rates in effect under Sections 171.002(a) and |
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(b) and Section 171.1016 at the time the determinations are made. |
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(d) The adjusted tax rates adopted under Subsection (b): |
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(1) apply to a report originally due on or after |
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January 1 of the even-numbered year following the date the rates are |
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adopted; and |
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(2) are considered for purposes of this chapter to be |
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the rates provided by and imposed under Section 171.002 or |
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171.1016, as applicable. |
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(e) In the state fiscal year in which the adjusted tax rates |
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determined under Subsection (b)(1) are less than 15 percent of the |
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tax rates under Sections 171.002(a) and (b) and Section 171.1016 in |
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effect on September 1, 2017: |
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(1) this chapter expires on December 31 of that year; |
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and |
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(2) not later than December 15 of that year the |
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comptroller shall: |
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(A) publish notice in the Texas Register that an |
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entity previously subject to the tax imposed under this chapter is |
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not required to file or pay the tax in connection with a report that |
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would otherwise be originally due on or after January 1 of the next |
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year; and |
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(B) provide any other notice relating to the |
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expiration of the tax that the comptroller considers appropriate. |
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(f) An action taken by the comptroller under this section is |
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final and may not be appealed. |
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(g) The comptroller shall adopt rules to implement this |
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section. |
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SECTION 3. Sections 171.1016(b) and (e), Tax Code, are |
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amended to read as follows: |
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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 percent or, if applicable, an adjusted tax |
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rate determined under Section 171.004. |
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(e) A reference in this chapter or other law to the rate of |
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the franchise tax means, as appropriate: |
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(1) [,] the rate under Section 171.002 or, for a |
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taxable entity that elects to pay the tax as provided by this |
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section, the rate under this section; or |
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(2) the adjusted rates under Section 171.004. |
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SECTION 4. Chapter 171, Tax Code, is amended by adding |
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Subchapter Z to read as follows: |
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SUBCHAPTER Z. EXPIRATION |
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Sec. 171.9321. EXPIRATION. This chapter expires on the |
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date provided by Section 171.004(e)(1). |
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SECTION 5. (a) After Chapter 171, Tax Code, expires as |
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provided by Subchapter Z, Chapter 171, Tax Code, as added by this |
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Act: |
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(1) the provisions of former Chapter 171 and the |
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provisions of Subtitle B, Title 2, Tax Code, continue to apply to |
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audits, deficiencies, redeterminations, and refunds of any tax due |
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or collected under former Chapter 171 until barred by limitations; |
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and |
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(2) former Sections 171.206 through 171.210, Tax Code, |
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continue to apply to information described by those sections. |
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(b) The expiration of Chapter 171, Tax Code, does not |
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affect: |
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(1) the status of a taxable entity that has had its |
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corporate privileges, certificate of authority, certificate of |
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organization, certificate of limited partnership, corporate |
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charter, or registration revoked, a suit filed against it, or a |
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receiver appointed under former Subchapter F, G, or H of that |
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chapter; |
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(2) the ability of the comptroller of public accounts, |
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secretary of state, or attorney general to take action against a |
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taxable entity under former Subchapter F, G, or H of that chapter |
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for actions that took place before the chapter expired; or |
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(3) the right of a taxable entity to contest a |
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forfeiture, revocation, lawsuit, or appointment of a receiver under |
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former Subchapter F, G, or H of that chapter. |
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SECTION 6. This Act applies only to a report originally due |
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on or after January 1, 2020. |
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SECTION 7. This Act takes effect September 1, 2019. |