(a)Effective date. Except as otherwise provided,
the [The] provisions of this section apply to franchise
tax reports originally due on or after January 1, 2008.
(b)Taxable and nontaxable entities. See §3.581
of this title (relating to Margin: Taxable and Nontaxable Entities)
for a list of taxable and nontaxable entities.
(c)Extension to November 15. Except for a taxable
entity that [which] has been notified by the
comptroller that it is required to make its franchise tax payments
by electronic funds transfer (see subsections (d), (f), and (g) of
this section), a taxable entity will be granted an extension to file
an annual report on or before the next November 15, if the taxable
entity:
(1)requests the extension on or before May 15;
(2)requests the extension on a form provided by the
comptroller; and
(3)remits with the extension request:
(A)90% or more of the amount of tax reported as due
on the report filed on or before November 15; or
(B)100% of the tax reported as due for the previous
calendar year on the report due in the previous calendar year and
filed on or before May 14 of the year for which the extension is requested.
(i)For reports originally due prior
to January 1, 2017, a [A] combined group may only
use this 100% option if the combined group has lost a member or if
the members of the combined group are the same as they were on the
last day of the period upon which the report due in the previous calendar
year was based.
(ii)For reports originally due on
or after January 1, 2017, a combined group may use this 100% option
regardless of any changes in combined group members.
(iii)A separate entity that was included
in a combined group report originally due in the previous calendar
year may not use the 100% extension option.
(d)No previous report. An extension shall not be granted
under subsection [subsections] (c)(3)(B) or
(f)(3)(B) of this section, if no report was due in the previous calendar
year or the report due in the previous calendar year is not filed
on or before May 14 of the year for which the extension is requested.
(e)Penalty and interest for taxable entities
not required to pay by electronic funds transfer. Penalty and
interest, except for a taxable entity that [which]
has been notified by the comptroller that it is required to make its
franchise tax payments by electronic funds transfer (see subsection
(h) of this section), will be calculated in [as though]
the following manner [were due dates].
(1)If a taxable entity is granted an extension by
remitting [and pays], on or before May 15, at least
100% of the tax reported as due for the previous calendar year on
the report due in the previous calendar year and filed on or before
May 14 of the year for which the extension is requested, then no
penalty or interest will be assessed if the remaining tax due is remitted
on or before November 15 [will be the due date for any
additional tax due].
(2)If a taxable entity is granted an extension by
remitting, [and pays] on or before May 15, 90% or
more of the tax that [which] will be reported
as due on or before November 15, then no penalty or interest
will be assessed if the remaining tax due is remitted on or before November
15 [will be the due date for any additional tax due].
(3)If a taxable entity, on or before May 15, requests
an extension but does not meet the requirements of paragraph [
qualify for an extension under paragraphs] (1) or (2) of this
subsection, then penalty and interest will be assessed on the
difference between 90% of the tax finally determined to be due and
the amount remitted on or before May 15. Penalty and interest will
also be assessed on 10% of the tax finally determined to be due if
not remitted on or before November 15. [May 15 is the due
date for 90% of the tax finally determined to be due and November
15 is the due date for 10% of the tax finally determined to be due.]
(f)Required electronic funds transfer extension to
August 15. Subject to paragraphs (1) - (3) of this subsection, a taxable
entity that [which] has been notified by the
comptroller that it is required to make its franchise tax payments
by electronic funds transfer (see §3.9 of this title (relating
to Electronic Filing of Returns and Reports; Electronic Transfer of
Certain Payments by Certain Taxpayers)) will be granted an extension
to file an annual report on or before the next August 15. A combined
group is required to make its franchise tax payments by electronic
funds transfer if any member of the combined group receives notice
of the requirement. An extension to August 15 will be granted if the
taxable entity:
(1)requests the extension on or before May 15;
(2)requests the extension on a form provided by the
comptroller; and
(3)remits with the extension request:
(A)90% or more of the amount of tax reported as due
on the report filed on or before August 15; or
(B)100% of the tax reported as due for the previous
calendar year on the report due in the previous calendar year and
filed on or before May 14 of the year for which the extension is requested.
(i)For reports originally due prior
to January 1, 2017, a [A] combined group may only
use this 100% option if the combined has lost a member or if the members
of the combined group are the same as they were on the last day of
the period upon which the report due in the previous calendar year
was based.
(ii)For reports originally due on
or after January 1, 2017, a combined group may use this 100% option
regardless of any changes in combined group members.
(iii)A separate entity that was included
in a combined group report originally due in the previous calendar
year may not use the 100% extension option.
(g)Required electronic funds transfer second extension
to November 15. A taxable entity granted an extension under subsection
(f) of this section[,] will be granted an extension to
file an annual report on or before the next November 15[,]
if the taxable entity:
(1)requests the extension on or before August 15;
(2)requests the extension on a form provided by the
comptroller; and
(3)remits with the request the difference between
the amount paid previously for the current reporting period and 100%
of the amount of tax reported as due on the report filed on or before
November 15.
(h)Penalty and interest for taxable entities
required to pay by electronic funds transfer [Required
electronic funds transfer penalty and interest]. Penalty and
interest will be calculated in [as though] the
following manner [were due dates].
(1)If a taxable entity is granted an extension until
August 15 by remitting [and pays], on or before
May 15, at least 100% of the tax reported as due for the previous
calendar year on the report due in the previous calendar year and
filed on or before May 14 of the year for which the extension is requested,
then no penalty or interest will be assessed if the remaining
tax due is remitted on or before August 15 [will be the
due date for any additional tax due]. However, if the taxable
entity requests, on or before August 15, an extension until November
15, and remits, on or before August 15, at least 99% of
the amount reported as due on or before November 15, then no
penalty will be assessed. Interest will be assessed on the remaining
tax due if not remitted on or before November 15 [will
be the due date for any additional tax due].
(2)If a taxable entity is granted an extension until
August 15 by remitting [and pays], on or before
May 15, 90% or more of the tax that [which]
will be reported as due on or before August 15, then no penalty
or interest will be assessed if the remaining tax due is remitted
on or before August 15 [will be the due date for any additional
tax due]. However, if the taxable entity requests, on or before
August 15, an extension until November 15, and remits, on or before
August 15, at least 99% of the amount reported as due on
or before November 15, then no penalty will be assessed. Interest
will be assessed on the remaining tax due if not remitted on or before November
15 [will be the due date for any additional tax due].
(3) If a taxable entity, on or before May 15, requests
an extension until August 15, but does not meet the requirements
of paragraph [qualify for an extension under paragraphs]
(1) or (2) of this subsection, then penalty and interest will
be assessed on the difference between 90% of the tax finally determined
to be due and the amount remitted on or before May 15. Penalty and
interest will also be assessed on 10% of the tax finally determined
to be due if not remitted on or before August 15. [May
15 is the due date for 90% of the tax finally determined to be due.
August 15 is the due date for the remaining 10% of the tax finally
determined to be due.] However, if the taxable entity requests,
on or before August 15, an extension until November 15, and remits
on or before August 15 at least 99% of the amount reported as due
on or before November 15, then penalty and interest will be assessed
on the difference between 90% of the tax finally determined to be
due and the amount remitted on or before May 15. No penalty will be
assessed on the remaining tax due if remitted on or before November
15. Interest will be assessed on the remaining tax due if not remitted
on or before November 15. [May 15 is the due date for 90%
of the amount reported as due on or before November 15, August 15
is the due date for 90% of the amount reported as due on or before
November 15, and November 15 is the due date for any additional tax
due.]
(i)No additional extensions. No additional extensions
will be granted for annual franchise tax reports pursuant to Tax Code, §111.057.
The agency certifies that legal counsel has reviewed
the proposal and found it to be within the state agency's legal authority
to adopt.
Filed with the
Office
of the Secretary of State on April 24, 2017
TRD-201701660 Lita Gonzalez
General Counsel
Comptroller of Public Accounts
Earliest possible date of adoption: June 4, 2017
For further information, please call: (512) 475-0387
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