Bill Text: TX HB1607 | 2019-2020 | 86th Legislature | Enrolled

Texas House Bill 1607 (Prior Session Legislation)

Bill Title: Relating to a deduction under the franchise tax for certain contracts with the federal government.

Spectrum: Slight Partisan Bill (Republican 8-5)

Status: (Passed) 2019-06-14 - Effective on 1/1/20 [HB1607 Detail]

Download: Texas-2019-HB1607-Enrolled.html



	H.B. No. 1607




	AN ACT
	relating to a deduction under the franchise tax for certain
	contracts with the federal government.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. The legislature finds that:
	(1) Texas is an epicenter of this nation's aerospace,
	aviation, defense, and military industries;
	(2) with NASA's Johnson Space Center in Houston, the
	new Army Futures Command, 15 active military bases across the
	state, and major military aircraft manufacturing and maintenance
	operations, the Texas economy and our nation's aerospace and
	defense capabilities are inextricably linked;
	(3) these crucial industries employ tens of thousands
	of Texans and support dozens of our communities across the state;
	and
	(4) it is therefore paramount that state tax policy
	foster a competitive economic climate to ensure growth and
	retention of jobs related to the development, manufacture,
	maintenance, and ongoing services for military hardware, aircraft,
	spacecraft, and weapons systems used by and produced for our armed
	forces, related federal government agencies, and our global allies.
	SECTION 2. Section 171.101, Tax Code, is amended by adding
	Subsections (e) and (f) to read as follows:
	(e) For purposes of Subsection (f), "aerospace costs" means
	any costs not already subtracted under Subsection (a)(1)(B)(ii)(a)
	that are properly allocated and incurred under the Federal
	Acquisition Regulation (48 C.F.R. Chapter 1) and subject to the
	requirements of 48 C.F.R. Chapter 2 or Chapter 18 for contracts, or
	subcontracts supporting those contracts, for the sale of goods or
	services to the federal government by a taxable entity in the
	aerospace industry that is engaged in activities described by North
	American Industry Classification System code 334511, 3364, 3399,
	5413, 5415, 5416, or 5419. For purposes of this subsection, a
	reference to a federal regulation includes a successor regulation.
	(f) In computing the sum for purposes of Subsection
	(a)(1)(B)(ii), a taxable entity may add to other amounts described
	by that subparagraph:
	(1) for a report originally due on or after January 1,
	2020, and before January 1, 2021, 20 percent of aerospace costs;
	(2) for a report originally due on or after January 1,
	2021, and before January 1, 2022, 40 percent of aerospace costs;
	(3) for a report originally due on or after January 1,
	2022, and before January 1, 2023, 60 percent of aerospace costs;
	(4) for a report originally due on or after January 1,
	2023, and before January 1, 2024, 80 percent of aerospace costs; and
	(5) for a report originally due on or after January 1,
	2024, 100 percent of aerospace costs.
	SECTION 3. This Act takes effect January 1, 2020.


	______________________________	______________________________
	President of the Senate	Speaker of the House


	I certify that H.B. No. 1607 was passed by the House on May
	10, 2019, by the following vote: Yeas 126, Nays 6, 1 present, not
	voting.

	______________________________
	Chief Clerk of the House


	I certify that H.B. No. 1607 was passed by the Senate on May
	20, 2019, by the following vote: Yeas 28, Nays 3.

	______________________________
	Secretary of the Senate
	APPROVED: _____________________
	Date

	_____________________
	Governor