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TAX IMPOSED. (a) A franchise tax is imposed on each taxable entity that does business in this state or that is chartered or organized in this state. (b) The tax imposed under this chapter extends to the limits of the United States Constitution and the federal law adopted under the United States Constitution.
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This web page provides the legal text of the Texas tax code section that defines a passive entity as an entity with certain income sources and limitations. It also shows the source, amendments, and related sections of the statute.
Is a passive entity the same for franchise tax as it is for federal tax? No. A passive entity is specifically defined for franchise tax purposes in Texas Tax Code Section 171.0003 .
Find the text of the Texas Tax Code Chapter 171, which imposes a franchise tax on corporations and limited liability companies that do business in Texas. Learn about the rates, exemptions, definitions, and reporting requirements of the tax.
Find the latest version of the Texas franchise tax law, which applies to corporations, limited liability companies, and other business entities. Learn about the definitions, exemptions, computation, payment, reports, enforcement, and refunds of the tax.
Find the full text of the Texas tax code chapter 171, which regulates the franchise tax imposed on certain entities. Browse the subchapters and sections on definitions, exemptions, computation, payment, reports, enforcement, refunds, and credits.
DEFINITION OF PASSIVE ENTITY. (a) An entity is a passive entity only if: (1) the entity is a general or limited partnership or a trust, other than a business trust; (2) during the period on which margin is based, the entity's federal gross income consists of at least 90 percent of the following income:
