Bill Text: TX HB953 | 2013-2014 | 83rd Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to a franchise tax credit for research and development activities performed in conjunction with institutions of higher education; authorizing a tax credit.

Spectrum: Slight Partisan Bill (Republican 18-9)

Status: (Engrossed - Dead) 2013-05-10 - Referred to s/c on Fiscal Matters by Chair [HB953 Detail]

Download: Texas-2013-HB953-Comm_Sub.html

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83R2707 KLA-D
By: Button, J. Davis of Harris, H.B. No. 953
Rodriguez of Travis, Branch, Vo, et al.

A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for research and development
activities performed in conjunction with institutions of higher
education; authorizing a tax credit.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter N to read as follows:
SUBCHAPTER N. TAX CREDIT FOR RESEARCH AND DEVELOPMENT ACTIVITIES
PERFORMED IN CONJUNCTION WITH INSTITUTIONS OF HIGHER EDUCATION
Sec. 171.701. DEFINITIONS. In this subchapter:
(1) "Public or private institution of higher
education" means:
(A) an institution of higher education, as
defined by Section 61.003, Education Code; or
(B) a private or independent institution of
higher education, as defined by Section 61.003, Education Code.
(2) "Qualified research" has the meaning assigned by
Section 41, Internal Revenue Code, except that the research must be
conducted in this state.
(3) "Qualified research expense" has the meaning
assigned by Section 41, Internal Revenue Code.
Sec. 171.702. ELIGIBILITY FOR CREDIT. A taxable entity is
eligible for a credit against the tax imposed under this chapter in
the amount and under the conditions and limitations provided by
this subchapter if the taxable entity contracts with one or more
public or private institutions of higher education for the
performance of qualified research.
Sec. 171.703. AMOUNT OF CREDIT. (a) The credit for any
report equals 20 percent of the difference between:
(1) the total amount of qualified research expenses
incurred in this state by the taxable entity under contracts
described by Section 171.702 during the period on which the report
is based; and
(2) 50 percent of the average amount of qualified
research expenses incurred in this state by the taxable entity
under contracts described by Section 171.702 during the three tax
years preceding the period on which the report is based.
(b) The burden of establishing entitlement to and the value
of the credit is on the taxable entity.
Sec. 171.704. LIMITATIONS. The total credit claimed under
this subchapter for a report, including the amount of any
carryforward credit under Section 171.705, may not exceed 50
percent of the amount of franchise tax due for the report before any
other applicable tax credits.
Sec. 171.705. CARRYFORWARD. If a taxable entity is
eligible for a credit that exceeds the limitation under Section
171.704, the taxable entity may carry the unused credit forward for
not more than 20 consecutive reports. A credit carryforward from a
previous report is considered to be used before the current year
credit.
Sec. 171.706. ASSIGNMENT PROHIBITED. A taxable entity may
not convey, assign, or transfer the credit allowed under this
subchapter to another entity unless all of the assets of the taxable
entity are conveyed, assigned, or transferred in the same
transaction.
Sec. 171.707. APPLICATION FOR CREDIT. A taxable entity
must apply for a credit under this subchapter on or with the tax
report for the period for which the credit is claimed.
Sec. 171.708. RULES. The comptroller shall adopt rules
necessary to implement this subchapter.
SECTION 2. 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, 2014.