87R10860 BEF-D
 
  By: Martinez Fischer H.B. No. 4467
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to imposing a tax on certain revenue derived from digital
  advertising services.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle G, Title 2, Tax Code, is amended by
  adding Chapter 184 to read as follows:
  CHAPTER 184. DIGITAL ADVERTISING TAX
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 184.0001.  DEFINITIONS. In this chapter:
               (1)  "Assessable base" means the portion of gross
  revenue derived from digital advertising services in this state.
               (2)  "Digital advertising services" means
  advertisement services on a digital interface. The term includes
  advertisements in the form of banner advertising, search engine
  advertising, interstitial advertising, and other comparable
  advertising services. 
               (3)  "Digital interface" means any type of software,
  including any part of an Internet website or application that a user
  is able to access. 
               (4)  "Gross revenue" means income or revenue from all
  sources located anywhere in the world, before any expenses or
  taxes, computed according to generally accepted accounting
  principles.
               (5)  "Person" does not include an individual.
               (6)  "Reporting period" means the calendar year on
  which a report is based.
               (7)  "User" means a person or individual who accesses a
  digital interface with a device. 
         Sec. 184.0002.  RULES. (a) The comptroller shall adopt
  rules necessary to implement, administer, and enforce this chapter.
         (b)  The rules must include a method for determining the
  portion of a person's gross revenue that is derived from digital
  advertising services in this state. The method may include formulas
  for apportioning any part of a person's gross revenue to this state
  based on any person or individual's nexus with this state for the
  purpose of taxation.
         (c)  The rules may include a requirement that a person make
  periodic reports during a reporting period and pay estimated tax
  amounts for each report.
  SUBCHAPTER B. TAX
         Sec. 184.0051.  TAX IMPOSED. A tax is imposed on a person
  whose:
               (1)  assessable base for the reporting period is at
  least $1 million; and
               (2)  gross revenue for the reporting period is at least
  $100 million.
         Sec. 184.0052.  TAX RATES. The rate of the tax imposed under
  this chapter is:
               (1)  2.5 percent of a person's assessable base for the
  reporting period if the person's gross revenue for the reporting
  period is at least $100 million but not more than $1 billion; 
               (2)  five percent of a person's assessable base for the
  reporting period if the person's gross revenue for the reporting
  period is more than $1 billion but not more than $5 billion;
               (3)  7.5 percent of a person's assessable base for the
  reporting period if the person's gross revenue for the reporting
  period is more than $5 billion but not more than $15 billion; and 
               (4)  10 percent of a person's assessable base for the
  reporting period if the person's gross revenue for the reporting
  period is more than $15 billion. 
         Sec. 184.0053.  BUSINESS ON WHICH TAX IS BASED. (a) The tax
  is based on gross revenue from business done during the reporting
  period.
         (b)  The comptroller shall adopt rules for determining when
  business is done. To the extent practicable, the comptroller shall
  consider business to be done when revenue derived from that
  business is recognized by a person according to generally accepted
  accounting principles.
  SUBCHAPTER C. RECORDS, REPORTS, AND PAYMENTS
         Sec. 184.0101.  RECORDS. (a) A person on whom the tax is or
  may be imposed shall keep records as required by comptroller rule.
         (b)  The comptroller may investigate or examine any records
  of a person to determine the person's liability for the tax.
         Sec. 184.0102.  REPORT AND PAYMENT. (a) A person on whom the
  tax is imposed shall file a report with the comptroller on or before
  April 15 following the end of a reporting period. The report must be
  on a form and contain the information required by the comptroller.
         (b)  Payment of the tax for a reporting period is due when the
  report is due. The person shall pay the tax to the comptroller.
  SUBCHAPTER D. DISPOSITION OF TAX PROCEEDS
         Sec. 184.0151.  ALLOCATION AND DEPOSIT OF PROCEEDS. The
  comptroller shall deposit:
               (1)  one-fourth of the proceeds from the collection of
  the tax to the credit of the foundation school fund; and
               (2)  three-fourths of the proceeds from the collection
  of the tax to the credit of the general revenue fund.
         SECTION 2.  (a) Chapter 184, Tax Code, as added by this Act,
  applies only to revenue derived from business done on or after
  January 1, 2022.
         (b)  A person is required to file the first report and make
  the first payment under Section 184.0102, Tax Code, as added by this
  Act, on or before April 15, 2023.
         SECTION 3.  (a) Except as provided by Subsection (b) of this
  section, this Act takes effect January 1, 2022.
         (b)  Section 184.0002, Tax Code, as added by this Act, takes
  effect September 1, 2021.