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A BILL TO BE ENTITLED
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AN ACT
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relating to the franchise tax liability of certain taxable |
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entities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 171, Tax Code, is amended |
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by adding Section 171.0024 to read as follows: |
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Sec. 171.0024. TAX LIABILITY OF CERTAIN TAXABLE ENTITIES. |
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(a) In this section, "taxable income" means: |
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(1) for a taxable entity treated for federal income |
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tax purposes as a corporation, the amount reportable as taxable |
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income on line 30, Internal Revenue Service Form 1120; |
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(2) for a taxable entity treated for federal income |
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tax purposes as a partnership, the amount reportable as ordinary |
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business income or loss on line 22, Internal Revenue Service Form |
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1065; or |
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(3) for a taxable entity other than a taxable entity |
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treated for federal income tax purposes as a corporation or |
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partnership, an amount determined in a manner substantially |
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equivalent to the amount for Subdivision (1) or (2) determined by |
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rules the comptroller shall adopt. |
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(b) Except as provided by Subsection (c), a taxable entity |
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is not required to pay any tax and is not considered to owe any tax |
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for a period on which margin is based if the taxable entity's |
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taxable income for the period is zero or less. |
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(c) Subsection (b) does not apply to a taxable entity that |
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is a member of a combined group. |
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(d) Section 171.1011(a) applies to a reference in this |
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section to an Internal Revenue Service form, and Section |
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171.1011(b) applies to a reference in this section to an amount |
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reportable on a line number on an Internal Revenue Service form. |
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(e) The comptroller shall adopt rules as necessary to |
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accomplish the legislative intent prescribed by this section. |
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SECTION 2. Section 171.204(b), Tax Code, is amended to read |
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as follows: |
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(b) The comptroller may require a taxable entity that does |
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not owe any tax because of the application of Section 171.002(d)(2) |
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to file an abbreviated information report with the comptroller |
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stating the amount of the taxable entity's total revenue from its |
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entire business. The comptroller may require a taxable entity that |
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does not owe any tax because of the application of Section 171.0024 |
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to file an abbreviated information report with the comptroller |
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stating the amount of the taxable entity's taxable income as |
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defined by that section. The comptroller may not require a taxable |
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entity described by this subsection to file an information report |
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that requires the taxable entity to report or compute its margin. |
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SECTION 3. This Act applies only to a report originally due |
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on or after the effective date of this Act. |
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SECTION 4. This Act takes effect January 1, 2012. |