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A BILL TO BE ENTITLED
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AN ACT
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relating to the exemption from the franchise tax and certain filing |
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fees for certain businesses owned by veterans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Effective January 1, 2031, Section 171.0001(4), |
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Tax Code, is amended to read as follows: |
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(4) "Beginning date" means: |
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(A) [except as provided by Paragraph (B): |
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[(i)] for a taxable entity chartered or |
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organized in this state, the date on which the taxable entity's |
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charter or organization takes effect; and |
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(B) [(ii)] for any other taxable entity, the date |
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on which the taxable entity begins doing business in this state[; or |
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[(B) for a taxable entity that qualifies as a new |
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veteran-owned business as defined by Section 171.0005, the earlier |
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of: |
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[(i) the fifth anniversary of the date on |
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which the taxable entity begins doing business in this state; or |
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[(ii) the date the taxable entity ceases to |
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qualify as a new veteran-owned business as defined by Section |
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171.0005]. |
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SECTION 2. Effective January 1, 2031, Section 171.063(g), |
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Tax Code, is amended to read as follows: |
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(g) If a corporation's federal tax exemption is withdrawn by |
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the Internal Revenue Service for failure of the corporation to |
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qualify or maintain its qualification for the exemption, the |
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corporation's exemption under this section ends on the effective |
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date of that withdrawal by the Internal Revenue Service. The |
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effective date of the withdrawal is considered the corporation's |
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beginning date for purposes of determining the corporation's |
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privilege periods and for all other purposes of this chapter[, |
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except that if the corporation would have been subject to Section |
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171.001(d) in the absence of the federal tax exemption, and the |
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effective date of the withdrawal is a date earlier than the date the |
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corporation would have become subject to the franchise tax as |
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provided by Section 171.001(d), the date the corporation would have |
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become subject to the franchise tax under that section is |
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considered the corporation's beginning date for those purposes]. |
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SECTION 3. Effective January 1, 2031, the following |
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sections are repealed: |
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(1) Section 12.005, Business Organizations Code; |
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(2) Section 171.0005, Tax Code; and |
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(3) Section 171.001(d), Tax Code. |
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SECTION 4. The following provisions are repealed: |
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(1) Section 3, Chapter 859 (S.B. 938), Acts of the 87th |
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Legislature, Regular Session, 2021, as effective January 1, 2026, |
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which amended Section 171.0001(4), Tax Code; |
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(2) Section 7, Chapter 859 (S.B. 938), Acts of the 87th |
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Legislature, Regular Session, 2021, as effective January 1, 2026, |
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which amended Section 171.063(g), Tax Code; and |
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(3) Section 9, Chapter 859 (S.B. 938), Acts of the 87th |
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Legislature, Regular Session, 2021, as effective January 1, 2026, |
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which provided for the repeal of Section 12.005, Business |
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Organizations Code, and Sections 171.0005, 171.001(d), and |
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171.204(d), Tax Code. |
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SECTION 5. Except as otherwise provided by this Act, this |
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Act takes effect September 1, 2025. |