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A BILL TO BE ENTITLED
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AN ACT
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relating to a franchise tax credit for certain businesses that make |
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investments in qualified opportunity zones. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 171, Tax Code, is amended by adding |
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Subchapter W to read as follows: |
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SUBCHAPTER W. TAX CREDIT FOR INVESTMENT IN ECONOMIC OPPORTUNITY |
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ZONE |
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Sec. 171.9261. DEFINITIONS. In this subchapter: |
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(1) "Economic opportunity zone" means a population |
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census tract located in this state that, as of September 1, 2019, |
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was designated as a qualified opportunity zone under Public Law |
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No. 115-97. |
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(2) "Qualifying investment" means an investment made |
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by a taxable entity: |
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(A) to remodel, rehabilitate, or construct a |
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structure owned or leased by the taxable entity that is located in |
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an economic opportunity zone; |
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(B) to purchase equipment or machinery to be |
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located in, or used in the operation of, a structure owned or leased |
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by the taxable entity that is located in an economic opportunity |
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zone; or |
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(C) for one or more of the purposes described by |
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Paragraphs (A) and (B). |
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Sec. 171.9262. ELIGIBILITY FOR CREDIT. A taxable entity is |
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eligible to apply for a credit in the amount and under the |
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conditions provided by this subchapter against the tax imposed |
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under this chapter. |
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Sec. 171.9263. QUALIFICATION. A taxable entity qualifies |
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for a credit under this subchapter if the taxable entity makes a |
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qualifying investment: |
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(1) on or after September 1, 2019; and |
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(2) under Section 171.9261(2)(A), (B), or (C) in a |
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total amount that is at least $100,000. |
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Sec. 171.9264. CERTIFICATION OF ELIGIBILITY. (a) Before |
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claiming a credit under this subchapter, the taxable entity that |
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made the qualifying investment must request from the comptroller a |
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certificate of eligibility on a form prescribed by the comptroller. |
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The taxable entity must include with the taxable entity's request |
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information sufficient to allow the comptroller to determine |
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whether the taxable entity has made a qualifying investment under |
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this subchapter. At a minimum, the taxable entity must provide an |
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audited cost report prepared by a certified public accountant that |
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includes: |
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(1) the total amount of the qualifying investment made |
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by the taxable entity; and |
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(2) the date on which each expenditure used to |
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determine the total amount of the qualifying investment made by the |
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taxable entity was made. |
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(b) The comptroller shall issue a certificate of |
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eligibility to a taxable entity that has made a qualifying |
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investment under this subchapter. |
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Sec. 171.9265. AMOUNT OF CREDIT; LIMITATIONS. (a) Subject |
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to Subsections (b) and (c), the amount of the credit under this |
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subchapter is equal to 25 percent of the total amount of the |
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qualifying investment. |
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(b) A taxable entity may not claim more than one credit |
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under this subchapter. |
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(c) The total credit claimed for a report may not exceed the |
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amount of franchise tax due for the report after all other |
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applicable tax credits. |
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(d) A qualifying investment may be counted only once in |
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determining the amount of the tax credit available, and more than |
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one taxable entity may not claim a credit for the same qualifying |
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investment. |
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Sec. 171.9266. APPLICATION FOR CREDIT. (a) A taxable |
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entity must apply for a credit under this subchapter on or with the |
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report for the period for which the credit is claimed. |
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(b) A taxable entity shall file with any report on which the |
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credit is claimed a copy of the certificate of eligibility issued by |
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the comptroller under Section 171.9264 and any other information |
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required by the comptroller to sufficiently demonstrate that the |
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taxable entity is eligible for the credit. |
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(c) The burden of establishing eligibility for and the value |
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of the credit is on the taxable entity. |
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Sec. 171.9267. RULES. The comptroller shall adopt rules |
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necessary to implement and administer this subchapter. |
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SECTION 2. Subchapter W, Chapter 171, Tax Code, as added by |
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this Act, applies only to a report originally due on or after the |
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effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2020. |