BILL ANALYSIS

 

 

Senate Research Center	H.B. 2611
86R23216 BEF-D	By: Morrison (Perry)
	Finance
	5/14/2019
	Engrossed

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

Interested parties note that a number of limited liability companies operate as a passive entity, but are not able to be treated as a passive entity for purposes of the franchise tax due to their exclusion in statute.

 

H.B. 2611 amends current law relating to the treatment of certain limited liability companies as passive entities for purposes of the franchise tax.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Section 171.0003(a), Tax Code, to provide that an entity is a passive entity only if the entity fits certain criteria, including if the entity is a general or limited partnership, a limited liability company, or a trust, other than a business trust, rather than the entity is a general or limited partnership, or a trust, other than a business trust.

 

SECTION 2. Makes application of this Act prospective.

 

SECTION 3. Effective date: January 1, 2020.