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A BILL TO BE ENTITLED
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AN ACT
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relating to adjustment of the rates of the franchise tax; providing |
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for decreases in tax rates. |
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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) Beginning in |
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2018, on January 1 of each year of a biennium for which the |
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comptroller's most recent certification estimate projects state |
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tax revenues not dedicated by the constitution for that biennium |
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will exceed the limit on appropriations in effect for the current |
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biennium under Section 22(a), Article VIII, Texas Constitution: |
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(1) the rate of the franchise tax under Section |
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171.002(a) is adjusted by subtracting 0.15 from the rate in effect |
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on December 31 of the previous year; |
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(2) the rate of the franchise tax under Section |
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171.002(b) is adjusted by subtracting 0.075 from the rate in effect |
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on December 31 of the previous year; and |
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(3) the rate of the franchise tax under Section |
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171.1016(b)(3) is adjusted by subtracting 0.0662 from the rate in |
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effect on December 31 of the previous year. |
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(b) The tax rates determined under Subsection (a) apply to a |
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report originally due on or after the date the determination is |
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made. |
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(c) Notwithstanding Subsection (a), if an adjustment |
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otherwise required by Subsection (a) would reduce a rate of the |
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franchise tax to less than zero, the rate is instead reduced to |
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zero. |
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(d) Notwithstanding any other law, if the rates of the |
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franchise tax are reduced to zero under Subsection (a) or (c), a |
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taxable entity does not owe any tax and is not required to file a |
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report that would otherwise be originally due on or after the date |
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the rates are reduced to zero. |
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(e) The comptroller shall make the determination required |
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by Subsection (a) and may adopt rules related to making that |
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determination. The comptroller shall publish the franchise tax |
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rates determined under this section in the Texas Register and on the |
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comptroller's Internet website not later than January 15 of each |
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year. |
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(f) A determination by the comptroller under this section is |
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final and may not be appealed. |
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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 adopted by the comptroller 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. 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. This Act takes effect January 1, 2018. |