Bill Text: TX HB28 | 2017-2018 | 85th Legislature | Engrossed
Bill Title: Relating to the use of certain surplus state revenue, in certain circumstances, to adjust franchise tax rates to phase out the franchise tax and to the expiration of that tax.
Spectrum: Strong Partisan Bill (Republican 28-2)
Status: (Engrossed - Dead) 2017-05-22 - Co-sponsor authorized [HB28 Detail]
Download: Texas-2017-HB28-Engrossed.html
85R23415 E | ||
By: Bonnen of Brazoria, et al. | H.B. No. 28 |
|
||
|
||
relating to the use of certain surplus state revenue, in certain | ||
circumstances, to adjust franchise tax rates to phase out the | ||
franchise tax and to the expiration of that tax. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Sections 171.002(a) and (b), Tax Code, are | ||
amended to read as follows: | ||
(a) Subject to Sections 171.003, 171.004, and 171.1016 and | ||
except as provided by Subsection (b), the rate of the franchise tax | ||
is 0.75 percent of taxable margin. | ||
(b) Subject to Sections 171.003, 171.004, and 171.1016, the | ||
rate of the franchise tax is 0.375 percent of taxable margin for | ||
those taxable entities primarily engaged in retail or wholesale | ||
trade. | ||
SECTION 2. Subchapter A, Chapter 171, Tax Code, is amended | ||
by adding Section 171.004 to read as follows: | ||
Sec. 171.004. ADJUSTMENT OF TAX RATES. (a) As soon as | ||
practical after September 1, but before December 15, of each | ||
odd-numbered year, the comptroller shall determine: | ||
(1) the ending balance of general revenue related | ||
funds available for certification for the preceding state fiscal | ||
biennium; and | ||
(2) the tax rates for purposes of Sections 171.002(a) | ||
and (b) and Section 171.1016 that, if applied beginning January 1 of | ||
the next year, are estimated to yield an amount of revenue for the | ||
state fiscal biennium in which the determination is made equal to | ||
the lesser of: | ||
(A) the ending balance determined under | ||
Subdivision (1); or | ||
(B) $3.5 billion. | ||
(b) Not later than December 15 of each odd-numbered year, | ||
the comptroller shall: | ||
(1) determine the adjusted tax rates, which are the | ||
tax rates under Sections 171.002(a) and (b) and Section 171.1016 in | ||
effect on the date the comptroller makes the determination under | ||
Subsection (a)(2) less the tax rates determined under Subsection | ||
(a)(2); and | ||
(2) except as provided by Subsection (e): | ||
(A) adopt the adjusted tax rates determined under | ||
Subdivision (1); | ||
(B) publish notice of the adjusted tax rates in | ||
the Texas Register; and | ||
(C) provide any other notice relating to the | ||
adjusted tax rates that the comptroller considers appropriate. | ||
(c) In determining the tax rates under Subsection (a)(2) and | ||
the adjusted tax rates under Subsection (b)(1), the comptroller | ||
shall ensure that the adjusted tax rates reflect proportional | ||
reductions to the tax rates in effect under Sections 171.002(a) and | ||
(b) and Section 171.1016 at the time the determinations are made. | ||
(d) The adjusted tax rates adopted under Subsection (b): | ||
(1) apply to a report originally due on or after | ||
January 1 of the even-numbered year following the date the rates are | ||
adopted; and | ||
(2) are considered for purposes of this chapter to be | ||
the rates provided by and imposed under Section 171.002 or | ||
171.1016, as applicable. | ||
(e) In the state fiscal year in which the adjusted tax rates | ||
determined under Subsection (b)(1) are less than 15 percent of the | ||
tax rates under Sections 171.002(a) and (b) and Section 171.1016 in | ||
effect on September 1, 2017: | ||
(1) this chapter expires on December 31 of that year; | ||
and | ||
(2) not later than December 15 of that year the | ||
comptroller shall: | ||
(A) publish notice in the Texas Register that an | ||
entity previously subject to the tax imposed under this chapter is | ||
not required to file or pay the tax in connection with a report that | ||
would otherwise be originally due on or after January 1 of the next | ||
year; and | ||
(B) provide any other notice relating to the | ||
expiration of the tax that the comptroller considers appropriate. | ||
(f) An action taken by the comptroller under this section is | ||
final and may not be appealed. | ||
(g) The comptroller shall adopt rules to implement this | ||
section. | ||
SECTION 3. Sections 171.1016(b) and (e), Tax Code, are | ||
amended to read as follows: | ||
(b) The amount of the tax for which a taxable entity that | ||
elects to pay the tax as provided by this section is liable is | ||
computed by: | ||
(1) determining the taxable entity's total revenue | ||
from its entire business, as determined under Section 171.1011; | ||
(2) apportioning the amount computed under | ||
Subdivision (1) to this state, as provided by Section 171.106, to | ||
determine the taxable entity's apportioned total revenue; and | ||
(3) multiplying the amount computed under Subdivision | ||
(2) by the rate of 0.331 percent or, if applicable, an adjusted tax | ||
rate determined under Section 171.004. | ||
(e) A reference in this chapter or other law to the rate of | ||
the franchise tax means, as appropriate: | ||
(1) [ |
||
taxable entity that elects to pay the tax as provided by this | ||
section, the rate under this section; or | ||
(2) the adjusted rates under Section 171.004. | ||
SECTION 4. Chapter 171, Tax Code, is amended by adding | ||
Subchapter Z to read as follows: | ||
SUBCHAPTER Z. EXPIRATION | ||
Sec. 171.9321. EXPIRATION. This chapter expires on the | ||
date provided by Section 171.004(e)(1). | ||
SECTION 5. (a) After Chapter 171, Tax Code, expires as | ||
provided by Subchapter Z, Chapter 171, Tax Code, as added by this | ||
Act: | ||
(1) the provisions of former Chapter 171 and the | ||
provisions of Subtitle B, Title 2, Tax Code, continue to apply to | ||
audits, deficiencies, redeterminations, and refunds of any tax due | ||
or collected under former Chapter 171 until barred by limitations; | ||
and | ||
(2) former Sections 171.206 through 171.210, Tax Code, | ||
continue to apply to information described by those sections. | ||
(b) The expiration of Chapter 171, Tax Code, does not | ||
affect: | ||
(1) the status of a taxable entity that has had its | ||
corporate privileges, certificate of authority, certificate of | ||
organization, certificate of limited partnership, corporate | ||
charter, or registration revoked, a suit filed against it, or a | ||
receiver appointed under former Subchapter F, G, or H of that | ||
chapter; | ||
(2) the ability of the comptroller of public accounts, | ||
secretary of state, or attorney general to take action against a | ||
taxable entity under former Subchapter F, G, or H of that chapter | ||
for actions that took place before the chapter expired; or | ||
(3) the right of a taxable entity to contest a | ||
forfeiture, revocation, lawsuit, or appointment of a receiver under | ||
former Subchapter F, G, or H of that chapter. | ||
SECTION 6. This Act applies only to a report originally due | ||
on or after January 1, 2020. | ||
SECTION 7. This Act takes effect September 1, 2019. |