Relating to the exemption from the franchise tax and certain filing fees for certain businesses owned by veterans.

89(R) SB 524 - Engrossed version - Bill Text

By: Campbell, et al.

S.B. No. 524

A BILL TO BE ENTITLED

AN ACT

relating to the exemption from the franchise tax and certain filing

fees for certain businesses owned by veterans.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Effective January 1, 2031, Section 171.0001(4),

Tax Code, is amended to read as follows:

(4) "Beginning date" means:

(A) [
except as provided by Paragraph (B):

[
(i)
] for a taxable entity chartered or

organized in this state, the date on which the taxable entity's

charter or organization takes effect; and

(B)
[
(ii)
] for any other taxable entity, the date

on which the taxable entity begins doing business in this state[
; or

[
(B)

for a taxable entity that qualifies as a new

veteran-owned business as defined by Section 171.0005, the earlier

of:

[
(i)

the fifth anniversary of the date on

which the taxable entity begins doing business in this state; or

[
(ii)

the date the taxable entity ceases to

qualify as a new veteran-owned business as defined by Section

171.0005
].

SECTION 2. Effective January 1, 2031, Section 171.063(g),

Tax Code, is amended to read as follows:

(g) If a corporation's federal tax exemption is withdrawn by

the Internal Revenue Service for failure of the corporation to

qualify or maintain its qualification for the exemption, the

corporation's exemption under this section ends on the effective

date of that withdrawal by the Internal Revenue Service. The

effective date of the withdrawal is considered the corporation's

beginning date for purposes of determining the corporation's

privilege periods and for all other purposes of this chapter[
,

except that if the corporation would have been subject to Section

171.001(d) in the absence of the federal tax exemption, and the

effective date of the withdrawal is a date earlier than the date the

corporation would have become subject to the franchise tax as

provided by Section 171.001(d), the date the corporation would have

become subject to the franchise tax under that section is

considered the corporation's beginning date for those purposes
].

SECTION 3. Effective January 1, 2031, the following

sections are repealed:

(1) Section 12.005, Business Organizations Code;

(2) Section 171.0005, Tax Code; and

(3) Section 171.001(d), Tax Code.

SECTION 4. The following provisions are repealed:

(1) Section 3, Chapter 859 (S.B. 938), Acts of the 87th

Legislature, Regular Session, 2021, as effective January 1, 2026,

which amended Section 171.0001(4), Tax Code;

(2) Section 7, Chapter 859 (S.B. 938), Acts of the 87th

Legislature, Regular Session, 2021, as effective January 1, 2026,

which amended Section 171.063(g), Tax Code; and

(3) Section 9, Chapter 859 (S.B. 938), Acts of the 87th

Legislature, Regular Session, 2021, as effective January 1, 2026,

which provided for the repeal of Section 12.005, Business

Organizations Code, and Sections 171.0005, 171.001(d), and

171.204(d), Tax Code.

SECTION 5. Except as otherwise provided by this Act, this

Act takes effect September 1, 2025.