Bill Text: TX HB2370 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to an exemption from the franchise tax for a limited period following the relocation of a taxable entity to this state from another state.
Spectrum: Partisan Bill (Republican 6-0)
Status: (Introduced - Dead) 2013-04-29 - Left pending in committee [HB2370 Detail]
Download: Texas-2013-HB2370-Introduced.html
83R8297 KLA-D | ||
By: Leach | H.B. No. 2370 |
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relating to an exemption from the franchise tax for a limited period | ||
following the relocation of a taxable entity to this state from | ||
another state. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 171.0001(4), Tax Code, is amended to | ||
read as follows: | ||
(4) "Beginning date" means: | ||
(A) for a taxable entity chartered or organized | ||
in this state, the date on which the taxable entity's charter or | ||
organization takes effect; and | ||
(B) for any other taxable entity: | ||
(i) [ |
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begins doing business in this state; or | ||
(ii) if the taxable entity concurrently | ||
begins doing business in this state and relocates its main office or | ||
other principal place of business to this state from another state, | ||
the third anniversary of the date on which the taxable entity begins | ||
doing business in this state. | ||
SECTION 2. Section 171.001, Tax Code, is amended by adding | ||
Subsection (d) to read as follows: | ||
(d) Notwithstanding Subsection (a), the tax imposed under | ||
this chapter is not imposed on a taxable entity that is chartered or | ||
organized under the laws of the United States or another state and | ||
that concurrently begins doing business in this state and relocates | ||
its main office or other principal place of business to this state | ||
from another state until the third anniversary of the date on which | ||
the taxable entity begins doing business in this state. | ||
SECTION 3. Section 171.063(g), Tax Code, is amended to read | ||
as follows: | ||
(g) If a corporation's federal tax exemption is withdrawn by | ||
the Internal Revenue Service for failure of the corporation to | ||
qualify or maintain its qualification for the exemption, the | ||
corporation's exemption under this section ends on the effective | ||
date of that withdrawal by the Internal Revenue Service. The | ||
effective date of the withdrawal is considered the corporation's | ||
beginning date for purposes of determining the corporation's | ||
privilege periods and for all other purposes of this chapter, | ||
except that if the corporation would have been subject to Section | ||
171.001(d) or exempted from the franchise tax under Section 171.089 | ||
in the absence of the federal tax exemption, and the effective date | ||
of the withdrawal is a date earlier than the date the corporation | ||
would have become subject to the franchise tax as provided by | ||
Section 171.001(d) or Section 171.089, as applicable, the date the | ||
corporation would have become subject to the franchise tax under | ||
the applicable provision is considered the corporation's beginning | ||
date for those purposes. | ||
SECTION 4. Subchapter B, Chapter 171, Tax Code, is amended | ||
by adding Section 171.089 to read as follows: | ||
Sec. 171.089. EXEMPTION FOR LIMITED PERIOD: CERTAIN | ||
ENTITIES RELOCATING TO TEXAS. (a) A taxable entity is exempted | ||
from the franchise tax for a period of three years if the taxable | ||
entity: | ||
(1) is chartered or organized under the laws of the | ||
United States or another state; | ||
(2) has been doing business in this state; and | ||
(3) had its main office or principal place of business | ||
located in another state but relocates that main office or other | ||
principal place of business to this state. | ||
(b) The three-year period during which a taxable entity is | ||
exempted from the franchise tax as provided by this section begins | ||
on January 1 of the year following the date the relocation of the | ||
main office or other principal place of business is completed, as | ||
defined by comptroller rules, and ends on the third anniversary of | ||
that date. | ||
SECTION 5. Section 171.204, Tax Code, is amended by adding | ||
Subsection (d) to read as follows: | ||
(d) The comptroller may require a taxable entity on which | ||
the tax imposed under this chapter is not imposed solely because of | ||
the application of Section 171.001(d) to file an information report | ||
stating the taxable entity's beginning date as determined under | ||
Section 171.0001(4)(B)(ii). The comptroller may require a taxable | ||
entity exempted from the franchise tax solely because of the | ||
application of Section 171.089 to file an information report | ||
stating the date the relocation of the taxable entity's main office | ||
or other principal place of business was completed, as defined by | ||
comptroller rules. The comptroller may require the report to | ||
include other information the comptroller determines necessary, | ||
except that the comptroller may not require the taxable entity to | ||
report or compute its margin. | ||
SECTION 6. (a) The change in law made by this Act applies to | ||
a taxable entity doing business in this state before, on, or after | ||
the effective date of this Act. | ||
(b) A taxable entity on which the tax under Chapter 171, Tax | ||
Code, was imposed before the effective date of this Act, but on | ||
which the tax is not imposed on the effective date of this Act | ||
because of the application of Section 171.001(d) or 171.089, Tax | ||
Code, as added by this Act, is not entitled to a refund of or credit | ||
for taxes paid under Chapter 171, Tax Code, before the effective | ||
date of this Act. | ||
SECTION 7. This Act takes effect January 1, 2014. |