Bill Text: TX SB112 | 2017-2018 | 85th Legislature | Introduced

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Bill Title: Relating to the decrease of the rates of the franchise tax under certain circumstances and the expiration of that tax.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-01-25 - Referred to Finance [SB112 Detail]

Download: Texas-2017-SB112-Introduced.html

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85R920 BEF-D
By: Huffines S.B. No. 112

A BILL TO BE ENTITLED
AN ACT
relating to the decrease of the rates of the franchise tax under
certain circumstances and 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) In this
section, "maximum general revenue fund appropriations" means for a
state fiscal biennium the sum of:
(1) the maximum amount of state tax revenues not
dedicated by the constitution that may be appropriated under
Sections 22(a) and (c), Article VIII, Texas Constitution, for that
biennium; and
(2) the estimated amount of anticipated revenue to be
deposited to the credit of the general revenue fund during that
biennium that is not subject to the limit on appropriations under
Section 22(a), Article VIII, Texas Constitution, as specified in
the estimate prepared by the comptroller as required by Section
49a(a), Article III, Texas Constitution.
(b) Beginning in 2020, on January 1 of each year if the
comptroller determines that the maximum general revenue fund
appropriations for the state fiscal biennium during which that date
occurs is at least $110 billion:
(1) the rate of the franchise tax under Section
171.002(a) is adjusted by subtracting 0.15 from the rate in effect
on December 31 of the previous year; and
(2) the rate of the franchise tax under Section
171.002(b) is adjusted by subtracting 0.075 from the rate in effect
on December 31 of the previous year.
(c) The tax rates determined under Subsection (b):
(1) apply to a report originally due on or after the
date the determination is made; and
(2) are considered for purposes of this chapter to be
the rates provided by and imposed under Section 171.002.
(d) Notwithstanding Subsection (b), if an adjustment
otherwise required by Subsection (b) would reduce a rate of the
franchise tax to less than zero, the rate is instead reduced to
zero.
(e) Notwithstanding any other law, if the rates of the
franchise tax are reduced to zero under Subsection (b) or (d), a
taxable entity does not owe any tax and is not required to file a
report that would otherwise be originally due on or after the date
the rates are reduced to zero.
(f) The comptroller shall make the determination required
by Subsection (b) and may adopt rules related to making that
determination. The comptroller shall publish the franchise tax
rates determined under this section in the Texas Register and on the
comptroller's Internet website not later than January 15 of each
year.
(g) In the state fiscal year in which the rates of the
franchise tax are reduced to zero under Subsection (b) or (d):
(1) this chapter expires as provided by Section
171.9121; and
(2) not later than January 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
no longer required to file a report or pay the tax; and
(B) provide any other notice relating to the
expiration of the tax that the comptroller considers appropriate.
(h) An action taken by the comptroller under this section is
final and may not be appealed.
SECTION 3. Chapter 171, Tax Code, is amended by adding
Subchapter Z to read as follows:
SUBCHAPTER Z. EXPIRATION
Sec. 171.9121. EXPIRATION. This chapter expires on
December 31 of the year in which the rates of the franchise tax are
reduced to zero under Section 171.004(b) or (d).
SECTION 4. (a) Chapter 171, Tax Code, and Subtitle B,
Title 2, Tax Code, continue to apply to audits, deficiencies,
redeterminations, and refunds of any tax due or collected under
Chapter 171 until barred by limitations.
(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 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 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
Subchapter F, G, or H of that chapter.
SECTION 5. This Act applies only to a report originally due
on or after January 1, 2020.
SECTION 6. This Act takes effect January 1, 2018.