Bill Text: TX SB138 | 2015-2016 | 84th Legislature | Introduced

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Bill Title: Relating to the phaseout and repeal of the franchise tax; lowering the rates of the tax.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-03-04 - Left pending in committee [SB138 Detail]

Download: Texas-2015-SB138-Introduced.html

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84R197 TJB-D
By: Perry S.B. No. 138

A BILL TO BE ENTITLED
AN ACT
relating to the phaseout and repeal of the franchise tax; lowering
the rates of the tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. (a) Effective January 1, 2016, Sections
171.002(a) and (b), Tax Code, are amended to read as follows:
(a) Subject to Sections 171.003 and 171.1016 and except as
provided by Subsection (b), the rate of the franchise tax is 0.75
[one] percent of taxable margin.
(b) Subject to Sections 171.003 and 171.1016, the rate of
the franchise tax is 0.38 [0.5] percent of taxable margin for those
taxable entities primarily engaged in retail or wholesale trade.
(b) This section applies only to a report originally due on
or after January 1, 2016.
SECTION 2. (a) Effective January 1, 2017, Sections
171.002(a) and (b), Tax Code, are amended to read as follows:
(a) Subject to Sections 171.003 and 171.1016 and except as
provided by Subsection (b), the rate of the franchise tax is 0.50
[one] percent of taxable margin.
(b) Subject to Sections 171.003 and 171.1016, the rate of
the franchise tax is 0.25 [0.5] percent of taxable margin for those
taxable entities primarily engaged in retail or wholesale trade.
(b) This section applies only to a report originally due on
or after January 1, 2017.
SECTION 3. (a) Effective January 1, 2018, Sections
171.002(a) and (b), Tax Code, are amended to read as follows:
(a) Subject to Sections 171.003 and 171.1016 and except as
provided by Subsection (b), the rate of the franchise tax is 0.25
[one] percent of taxable margin.
(b) Subject to Sections 171.003 and 171.1016, the rate of
the franchise tax is 0.13 [0.5] percent of taxable margin for those
taxable entities primarily engaged in retail or wholesale trade.
(b) This section applies only to a report originally due on
or after January 1, 2018.
SECTION 4. (a) Effective January 1, 2016, Section
171.1016(b), Tax Code, is amended to read as follows:
(b) The amount of the tax for which a taxable entity that
elects to pay the tax as provided by this section is liable is
computed by:
(1) determining the taxable entity's total revenue
from its entire business, as determined under Section 171.1011;
(2) apportioning the amount computed under
Subdivision (1) to this state, as provided by Section 171.106, to
determine the taxable entity's apportioned total revenue; and
(3) multiplying the amount computed under Subdivision
(2) by the rate of 0.43 [0.575] percent.
(b) This section applies only to a report originally due on
or after January 1, 2016.
SECTION 5. (a) Effective January 1, 2017, Section
171.1016(b), Tax Code, is amended to read as follows:
(b) The amount of the tax for which a taxable entity that
elects to pay the tax as provided by this section is liable is
computed by:
(1) determining the taxable entity's total revenue
from its entire business, as determined under Section 171.1011;
(2) apportioning the amount computed under
Subdivision (1) to this state, as provided by Section 171.106, to
determine the taxable entity's apportioned total revenue; and
(3) multiplying the amount computed under Subdivision
(2) by the rate of 0.29 [0.575] percent.
(b) This section applies only to a report originally due on
or after January 1, 2017.
SECTION 6. (a) Effective January 1, 2018, Section
171.1016(b), Tax Code, is amended to read as follows:
(b) The amount of the tax for which a taxable entity that
elects to pay the tax as provided by this section is liable is
computed by:
(1) determining the taxable entity's total revenue
from its entire business, as determined under Section 171.1011;
(2) apportioning the amount computed under
Subdivision (1) to this state, as provided by Section 171.106, to
determine the taxable entity's apportioned total revenue; and
(3) multiplying the amount computed under Subdivision
(2) by the rate of 0.14 [0.575] percent.
(b) This section applies only to a report originally due on
or after January 1, 2018.
SECTION 7. Section 171.362(f), Tax Code, is amended to read
as follows:
(f) In addition to any other penalty authorized by this
section, a taxable entity that owes a tax for a reporting period and
[who] fails to file a report for the reporting period as required by
this chapter shall pay a penalty of $50. The penalty provided by
this subsection is assessed without regard to whether the taxable
entity subsequently files the report [or whether any taxes were due
from the taxable entity for the reporting period under the required
report].
SECTION 8. (a) Chapter 171, Tax Code, is repealed.
(b) A taxable entity that is subject to the franchise tax
imposed under Chapter 171, Tax Code, on December 31, 2018, shall
file a final franchise tax return and pay a transitional tax as
required by this subsection on or before May 15, 2019. The
transitional tax is equal to the tax the taxable entity would have
paid in 2019 under Chapter 171, Tax Code, if Chapter 171, Tax Code,
had not been repealed. The provisions of Chapter 171, Tax Code,
relating to the computation and payment of the franchise tax remain
in effect after the repeal of Chapter 171, Tax Code, by this section
for the purposes of computing and paying the transitional tax
required by this subsection.
(c) 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, including
the tax due as provided by Subsection (b) of this section, until
barred by limitations.
(d) The repeal 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, suit filed against it, or a
receiver appointed under Subchapter F, G, or H of that chapter;
(2) the ability of the comptroller, 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 repeal; 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.
(e) This section takes effect January 1, 2019.
SECTION 9. Except as otherwise provided by this Act, this
Act applies only to a report originally due on or after the
effective date of this Act.
SECTION 10. Except as otherwise provided by this Act, this
Act takes effect January 1, 2016.