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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. Section 171.0005, Tax Code, is amended to read as |
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follows: |
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Sec. 171.0005. DEFINITION OF NEW VETERAN-OWNED BUSINESS. |
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(a) A taxable entity is a new veteran-owned business only if the |
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taxable entity is a new business [in which] each owner of which is a |
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natural person who: |
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(1) served in and was honorably discharged from a |
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branch of the United States armed forces; |
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(2) is a resident of this state; |
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(3) is not an owner of a different taxable entity that |
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is receiving an exemption from the tax imposed by this chapter as a |
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new veteran-owned business; and |
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(4) [(2)] provides [verification] to the comptroller: |
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(A) verification of the person's service and |
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discharge required by Subdivision (1); and |
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(B) documentation demonstrating the person's |
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residency required by Subdivision (2). |
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(b) The Texas Veterans Commission shall provide to a person |
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who meets the requirements of Subsection (a)(1) written |
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verification of that status in a form required by the comptroller. |
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(c) The comptroller shall adopt rules prescribing: |
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(1) the form and content of the verification required |
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under Subsection (b) and the manner in which that [the] |
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verification may be provided to the comptroller; and |
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(2) the documentation required to be provided to |
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demonstrate that a person is a resident of this state, which may |
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include the person's United States Department of Defense Form |
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DD-214, and the manner in which that documentation may be provided |
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to the comptroller. |
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(d) The comptroller may require a taxable entity to provide |
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any information reasonably necessary to determine whether the |
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entity is a new veteran-owned business for purposes of Subsection |
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(a). |
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(e) [(c)] For purposes of Subsection (a), a new business is |
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a taxable entity that: |
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(1) is chartered or organized or otherwise formed in |
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this state; and |
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(2) first begins doing business in this state on or |
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after January 1, 2022. |
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SECTION 2. 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 3. The change in law made by this Act to Section |
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171.0005, Tax Code, does not affect the receipt of a franchise tax |
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exemption by a taxable entity that qualifies as a new veteran-owned |
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business under that section before the effective date of this Act. |
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The receipt of a franchise tax exemption by a taxable entity that |
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qualifies as a new veteran-owned business under Section 171.0005, |
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Tax Code, before the effective date of this Act is governed by the |
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law in effect on the date the taxable entity qualified as a new |
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veteran-owned business under that section, and the former law is |
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continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2025. |
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* * * * * |