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