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A BILL TO BE ENTITLED
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AN ACT
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relating to the decrease of the rates of the franchise tax under |
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certain circumstances and 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) In this |
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section, "maximum general revenue fund appropriations" means for a |
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state fiscal biennium the sum of: |
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(1) the maximum amount of state tax revenues not |
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dedicated by the constitution that may be appropriated under |
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Sections 22(a) and (c), Article VIII, Texas Constitution, for that |
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biennium; and |
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(2) the estimated amount of anticipated revenue to be |
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deposited to the credit of the general revenue fund during that |
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biennium that is not subject to the limit on appropriations under |
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Section 22(a), Article VIII, Texas Constitution, as specified in |
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the estimate prepared by the comptroller as required by Section |
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49a(a), Article III, Texas Constitution. |
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(b) Beginning in 2020, on January 1 of each year if the |
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comptroller determines that the maximum general revenue fund |
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appropriations for the state fiscal biennium during which that date |
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occurs is at least $110 billion: |
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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; and |
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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. |
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(c) The tax rates determined under Subsection (b): |
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(1) apply to a report originally due on or after the |
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date the determination is made; 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. |
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(d) Notwithstanding Subsection (b), if an adjustment |
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otherwise required by Subsection (b) 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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(e) Notwithstanding any other law, if the rates of the |
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franchise tax are reduced to zero under Subsection (b) or (d), 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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(f) The comptroller shall make the determination required |
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by Subsection (b) 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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(g) In the state fiscal year in which the rates of the |
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franchise tax are reduced to zero under Subsection (b) or (d): |
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(1) this chapter expires as provided by Section |
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171.9121; and |
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(2) not later than January 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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no longer required to file a report or pay the tax; 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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(h) An action taken by the comptroller under this section is |
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final and may not be appealed. |
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SECTION 3. 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. 171.9121. EXPIRATION. This chapter expires on |
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December 31 of the year in which the rates of the franchise tax are |
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reduced to zero under Section 171.004(b) or (d). |
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SECTION 4. (a) Chapter 171, Tax Code, and Subtitle B, |
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Title 2, Tax Code, continue to apply to audits, deficiencies, |
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redeterminations, and refunds of any tax due or collected under |
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Chapter 171 until barred by limitations. |
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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 Subchapter F, G, or H of that 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 Subchapter F, G, or H of that chapter for |
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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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Subchapter F, G, or H of that chapter. |
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SECTION 5. This Act applies only to a report originally due |
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on or after January 1, 2020. |
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SECTION 6. This Act takes effect January 1, 2018. |