Bill Text: TX HB983 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to a franchise tax credit for enterprise projects for certain capital investments.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-04-30 - Committee report sent to Calendars [HB983 Detail]
Download: Texas-2019-HB983-Introduced.html
| 86R4647 BEF-F | ||
| By: Parker | H.B. No. 983 | |
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| relating to a franchise tax credit for enterprise projects for | ||
| certain capital investments. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Chapter 171, Tax Code, is amended by adding | ||
| Subchapter U to read as follows: | ||
| SUBCHAPTER U. TAX CREDITS FOR ENTERPRISE PROJECTS FOR CERTAIN | ||
| CAPITAL INVESTMENTS | ||
| Sec. 171.9221. DEFINITIONS. In this subchapter: | ||
| (1) "Enterprise project" means a person designated as | ||
| an enterprise project under Chapter 2303, Government Code, on or | ||
| after September 1, 2003. | ||
| (2) "Qualified business" has the meaning assigned by | ||
| Section 2303.003, Government Code. | ||
| (3) "Qualified capital investment" means tangible | ||
| personal property first placed in service by an enterprise project | ||
| after January 1, 2015, that is described in Section 1245(a), | ||
| Internal Revenue Code, such as engines, machinery, tools, and | ||
| implements used in a trade or business or held for investment and | ||
| subject to an allowance for depreciation, cost recovery under the | ||
| accelerated cost recovery system, or amortization. The term does | ||
| not include real property or buildings and their structural | ||
| components. Property that is leased under a capitalized lease is | ||
| considered a qualified capital investment, but property that is | ||
| leased under an operating lease is not considered a qualified | ||
| capital investment. Property expensed under Section 179, Internal | ||
| Revenue Code, is not considered a qualified capital investment. | ||
| Sec. 171.9222. TANGIBLE PERSONAL PROPERTY FIRST PLACED IN | ||
| SERVICE BY AN ENTERPRISE PROJECT. For purposes of determining | ||
| whether an investment is a qualified capital investment under | ||
| Section 171.9221, "tangible personal property first placed in | ||
| service by an enterprise project" includes tangible personal | ||
| property: | ||
| (1) purchased by an enterprise project for placement | ||
| in an incomplete improvement that is under active construction or | ||
| other physical preparation; | ||
| (2) identified by a purchase order, invoice, billing, | ||
| sales slip, or contract; and | ||
| (3) physically present at the enterprise project's | ||
| qualified business site, as defined by Section 2303.003, Government | ||
| Code, and in use by the enterprise project on the original due date | ||
| of the report on which the credit is taken. | ||
| Sec. 171.9223. ELIGIBILITY. An enterprise project that is | ||
| a qualified business 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. | ||
| Sec. 171.9224. CALCULATION OF CREDIT. (a) An enterprise | ||
| project that is eligible for a credit under this subchapter may, | ||
| beginning on January 1 of the year in which the project is | ||
| designated or January 1, 2015, establish a credit equal to 7.5 | ||
| percent of the qualified capital investment. | ||
| (b) A taxable entity may file an amended report to claim all | ||
| or part of a credit earned in a previous tax year that has not been | ||
| claimed on another report, subject to Section 171.9225, if the | ||
| applicable period of limitation under Section 111.107 and | ||
| Subchapter D, Chapter 111, for claiming that credit has not | ||
| expired. | ||
| Sec. 171.9225. LIMITATION. The total credit claimed under | ||
| this subchapter for a report, including the amount of any | ||
| carryforward credit under Section 171.9226, may not exceed 50 | ||
| percent of the amount of franchise tax due for the report before any | ||
| other applicable tax credits. | ||
| Sec. 171.9226. CARRYFORWARD. (a) If an enterprise project | ||
| is eligible for a credit from an installment that exceeds a | ||
| limitation under Section 171.9225, the enterprise project may carry | ||
| the unused credit forward for not more than five consecutive | ||
| reports. | ||
| (b) A carryforward is considered the remaining portion of an | ||
| installment that cannot be claimed in the current year because of a | ||
| tax limitation under Section 171.9225. A carryforward is added to | ||
| the next year's installment of the credit in determining the tax | ||
| limitation for that year. A credit carryforward from a previous | ||
| report is considered to be used before the current year | ||
| installment. | ||
| Sec. 171.9227. CERTIFICATION OF ELIGIBILITY. (a) For the | ||
| initial and each succeeding report in which a credit is claimed | ||
| under this subchapter, the enterprise project shall file with its | ||
| report, on a form provided by the comptroller, information that | ||
| sufficiently demonstrates that the enterprise project is eligible | ||
| for the credit. | ||
| (b) The burden of establishing entitlement to and the value | ||
| of the credit is on the enterprise project. | ||
| Sec. 171.9228. BIENNIAL REPORT BY COMPTROLLER. (a) Before | ||
| the beginning of each regular session of the legislature, the | ||
| comptroller shall submit to the governor, the lieutenant governor, | ||
| and the speaker of the house of representatives a report that | ||
| states: | ||
| (1) the total amount of qualified capital investments | ||
| made by enterprise projects that claim a credit under this | ||
| subchapter and the average and median wages paid by those | ||
| enterprise projects; | ||
| (2) the total amount of credits applied against the | ||
| tax under this chapter and the amount of unused credits; | ||
| (3) the total amount of franchise tax due by | ||
| enterprise projects claiming a credit under this subchapter before | ||
| and after the application of the credit and the average percentage | ||
| reduction in franchise tax due by the enterprise projects; | ||
| (4) the percentage of tax credits under this | ||
| subchapter that were awarded to enterprise projects with fewer than | ||
| 100 employees; | ||
| (5) the two-digit standard industrial classification | ||
| of enterprise projects claiming a credit under this subchapter; | ||
| (6) the geographical distribution of the qualified | ||
| capital investments on which tax credit claims are made under this | ||
| subchapter; and | ||
| (7) the impact of the credit provided under this | ||
| subchapter on employment, capital investment, personal income, and | ||
| state tax revenues. | ||
| (b) The comptroller may not include in the report | ||
| information that is confidential by law. | ||
| (c) For purposes of this section, the comptroller may | ||
| require an enterprise project that claims a credit under this | ||
| subchapter to submit information, on a form provided by the | ||
| comptroller, on the location of the enterprise project's capital | ||
| investment in this state and any other information necessary to | ||
| complete the report required under this section. | ||
| (d) The comptroller shall provide notice to the members of | ||
| the legislature that the report required under this section is | ||
| available on request. | ||
| Sec. 171.9229. COMPTROLLER POWERS AND DUTIES. The | ||
| comptroller shall adopt rules and forms necessary to implement this | ||
| subchapter. | ||
| SECTION 2. Except as provided by Section 171.9224(b), Tax | ||
| Code, as added by this Act, this Act applies only to a report | ||
| originally due on or after the effective date of this Act. | ||
| SECTION 3. This Act takes effect immediately if it receives | ||
| a vote of two-thirds of all the members elected to each house, as | ||
| provided by Section 39, Article III, Texas Constitution. If this | ||
| Act does not receive the vote necessary for immediate effect, this | ||
| Act takes effect September 1, 2019. | ||
