Bill Text: TX SB1061 | 2023-2024 | 88th Legislature | Introduced
Bill Title: Relating to the computation of and total revenue exemption for the franchise tax.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2023-03-03 - Referred to Finance [SB1061 Detail]
Download: Texas-2023-SB1061-Introduced.html
88R1133 BEF-D | ||
By: Schwertner | S.B. No. 1061 |
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relating to the computation of and total revenue exemption for the | ||
franchise tax. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 171.002(d), Tax Code, is amended to read | ||
as follows: | ||
(d) A taxable entity is not required to pay any tax and is | ||
not considered to owe any tax for a period if: | ||
(1) the amount of tax computed for the taxable entity | ||
is less than $1,000; or | ||
(2) the amount of the taxable entity's total revenue | ||
from its entire business is less than or equal to $2 [ |
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the amount determined under Section 171.006 per 12-month period on | ||
which margin is based. | ||
SECTION 2. Sections 171.101(a) and (b), Tax Code, are | ||
amended to read as follows: | ||
(a) The taxable margin of a taxable entity is computed by: | ||
(1) determining the taxable entity's margin, which is | ||
the lesser of: | ||
(A) the amount provided by this paragraph, which | ||
is the lesser of: | ||
(i) 70 percent of the taxable entity's total | ||
revenue from its entire business, as determined under Section | ||
171.1011; or | ||
(ii) an amount equal to the taxable entity's | ||
total revenue from its entire business as determined under Section | ||
171.1011 minus $2 [ |
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(B) an amount computed by determining the | ||
taxable entity's total revenue from its entire business under | ||
Section 171.1011 and subtracting the greater of: | ||
(i) $2 [ |
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(ii) an amount equal to the sum of: | ||
(a) at the election of the taxable | ||
entity, either: | ||
(1) cost of goods sold, as | ||
determined under Section 171.1012; or | ||
(2) compensation, as determined | ||
under Section 171.1013; and | ||
(b) any compensation, as determined | ||
under Section 171.1013, paid to an individual during the period the | ||
individual is serving on active duty as a member of the armed forces | ||
of the United States if the individual is a resident of this state | ||
at the time the individual is ordered to active duty and the cost of | ||
training a replacement for the individual; | ||
(2) apportioning the taxable entity's margin to this | ||
state as provided by Section 171.106 to determine the taxable | ||
entity's apportioned margin; and | ||
(3) subtracting from the amount computed under | ||
Subdivision (2) any other allowable deductions to determine the | ||
taxable entity's taxable margin. | ||
(b) Notwithstanding Subsection (a)(1)(B)(ii)(a), a | ||
professional employer organization may subtract only the greater of | ||
$2 [ |
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compensation as determined under Section 171.1013. | ||
SECTION 3. Section 171.1014(d), Tax Code, is amended to | ||
read as follows: | ||
(d) For purposes of Section 171.101, a combined group shall | ||
make an election to subtract either cost of goods sold or | ||
compensation that applies to all of its members, or $2 [ |
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million. Regardless of the election, the taxable margin of the | ||
combined group may not exceed the amount provided by Section | ||
171.101(a)(1)(A) for the combined group. | ||
SECTION 4. This Act applies only to a report originally due | ||
on or after January 1, 2024. | ||
SECTION 5. This Act takes effect January 1, 2024. |