Bill Text: TX HB2397 | 2019-2020 | 86th Legislature | Comm Sub
Bill Title: Relating to a franchise tax credit for certain businesses that make investments in qualified opportunity zones.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2019-05-03 - Committee report sent to Calendars [HB2397 Detail]
Download: Texas-2019-HB2397-Comm_Sub.html
86R24154 CJC-D | |||
By: Clardy, Shine, Guillen | H.B. No. 2397 | ||
Substitute the following for H.B. No. 2397: | |||
By: Wray | C.S.H.B. No. 2397 |
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relating to a franchise tax credit for certain businesses that make | ||
investments in qualified opportunity zones. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 171, Tax Code, is amended by adding | ||
Subchapter W to read as follows: | ||
SUBCHAPTER W. TAX CREDIT FOR INVESTMENT IN ECONOMIC OPPORTUNITY | ||
ZONE | ||
Sec. 171.9261. DEFINITIONS. In this subchapter: | ||
(1) "Economic opportunity zone" means a population | ||
census tract located in this state that, as of September 1, 2019, | ||
was designated as a qualified opportunity zone under Public Law | ||
No. 115-97. | ||
(2) "Qualifying investment" means an investment made | ||
by a taxable entity: | ||
(A) to remodel, rehabilitate, or construct a | ||
structure owned or leased by the taxable entity that is located in | ||
an economic opportunity zone; | ||
(B) to purchase equipment or machinery to be | ||
located in, or used in the operation of, a structure owned or leased | ||
by the taxable entity that is located in an economic opportunity | ||
zone; or | ||
(C) for one or more of the purposes described by | ||
Paragraphs (A) and (B). | ||
Sec. 171.9262. ELIGIBILITY FOR CREDIT. A taxable entity is | ||
eligible to apply for a credit in the amount and under the | ||
conditions provided by this subchapter against the tax imposed | ||
under this chapter. | ||
Sec. 171.9263. QUALIFICATION. A taxable entity qualifies | ||
for a credit under this subchapter if the taxable entity makes a | ||
qualifying investment: | ||
(1) on or after September 1, 2019; and | ||
(2) under Section 171.9261(2)(A), (B), or (C) in a | ||
total amount that is at least $100,000. | ||
Sec. 171.9264. CERTIFICATION OF ELIGIBILITY. (a) Before | ||
claiming a credit under this subchapter, the taxable entity that | ||
made the qualifying investment must request from the comptroller a | ||
certificate of eligibility on a form prescribed by the comptroller. | ||
The taxable entity must include with the taxable entity's request | ||
information sufficient to allow the comptroller to determine | ||
whether the taxable entity has made a qualifying investment under | ||
this subchapter. At a minimum, the taxable entity must provide an | ||
audited cost report prepared by a certified public accountant that | ||
includes: | ||
(1) the total amount of the qualifying investment made | ||
by the taxable entity; and | ||
(2) the date on which each expenditure used to | ||
determine the total amount of the qualifying investment made by the | ||
taxable entity was made. | ||
(b) The comptroller shall issue a certificate of | ||
eligibility to a taxable entity that has made a qualifying | ||
investment under this subchapter. | ||
Sec. 171.9265. AMOUNT OF CREDIT; LIMITATIONS. (a) Subject | ||
to Subsections (b) and (c), the amount of the credit under this | ||
subchapter is equal to 25 percent of the total amount of the | ||
qualifying investment. | ||
(b) A taxable entity may not claim more than one credit | ||
under this subchapter. | ||
(c) The total credit claimed for a report may not exceed the | ||
amount of franchise tax due for the report after all other | ||
applicable tax credits. | ||
(d) A qualifying investment may be counted only once in | ||
determining the amount of the tax credit available, and more than | ||
one taxable entity may not claim a credit for the same qualifying | ||
investment. | ||
Sec. 171.9266. APPLICATION FOR CREDIT. (a) A taxable | ||
entity must apply for a credit under this subchapter on or with the | ||
report for the period for which the credit is claimed. | ||
(b) A taxable entity shall file with any report on which the | ||
credit is claimed a copy of the certificate of eligibility issued by | ||
the comptroller under Section 171.9264 and any other information | ||
required by the comptroller to sufficiently demonstrate that the | ||
taxable entity is eligible for the credit. | ||
(c) The burden of establishing eligibility for and the value | ||
of the credit is on the taxable entity. | ||
Sec. 171.9267. RULES. The comptroller shall adopt rules | ||
necessary to implement and administer this subchapter. | ||
SECTION 2. Subchapter W, Chapter 171, Tax Code, as added by | ||
this Act, applies only to a report originally due on or after the | ||
effective date of this Act. | ||
SECTION 3. This Act takes effect January 1, 2020. |