Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter V - FRANCHISE TAX › Section 3.581 - Margin: Taxable and Nontaxable Entities

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Effective date. The provisions of this section apply to franchise tax reports
				  originally due on or after January 1, 2008.
(b) Definitions. The following words and
				  terms, when used in this section, shall have the following meanings, unless the
				  context clearly indicates otherwise.
(1)
				  Banking corporation--Each state, national, domestic, or foreign bank, whether
				  organized under the laws of this state, another state, or another country, or
				  under federal law, including a limited banking association organized under
				  Finance Code, Title 3, Subtitle A, and each bank organized under §25(a),
				  Federal Reserve Act (12
				  U.S.C. §§611 -
				  631)
				  (edge corporations), but does not include a bank holding company as that term
				  is defined by Bank Holding Company Act of 1956, §2, (12 U.S.C.
				  §1841).
(2) Business trust--An entity as defined by
				  Internal Revenue Code, Treasury Regulation, §301.7701-4(b).
(3) Corporation--An entity formed pursuant to
				  Business Corporation Act, Non-Profit Corporation Act, Professional Corporation
				  Act, or Business Organizations Code, Title 2 or 7, or other equivalent statute
				  of this state or of another jurisdiction.
(4) Escrow--A legal arrangement whereby an
				  asset is delivered to a third party to be held in trust or otherwise pending a
				  contingency or the fulfillment of a condition or conditions in a
				  contract.
(5) Estate of a natural
				  person--An entity as defined by Internal Revenue Code, §7701(a)(30)(D),
				  excluding an estate taxable as a business entity pursuant to Internal Revenue
				  Code, Treasury Regulation, §301.7701-4(b). An estate of a natural person
				  shall include a trust that makes an election under Internal Revenue Code,
				  §645 to be treated and taxed as part of an estate for federal income tax
				  purposes.
(6) General
				  partnership--A partnership as described in Revised Partnership Act, Article
				  6132b-1.01 et. seq., or Business Organizations Code, Title 4, Chapter 152, or
				  an equivalent statute in another jurisdiction.
(7) Grantor trust--A trust as defined by
				  Internal Revenue Code, §671 and §7701(a)(30)(E), excluding a trust
				  taxable as a business entity pursuant to Treasury Regulation,
				  §301.7701-4(b).
(8) Holding
				  company--An entity that confines its activities to owning stock in, and
				  supervising management of, other companies.
(9) Joint stock company--A common-law
				  unincorporated business enterprise of natural persons possessing common capital
				  with ownership interests represented by shares of stock.
(10) Joint Venture--A partnership engaged in
				  the joint prosecution of a particular transaction for mutual profit.
(11) Limited liability company--An entity
				  formed pursuant to Limited Liability Company Act, Article 1528n, or Business
				  Organizations Code, Title 3 or 7, or an equivalent statute in another
				  jurisdiction.
(12) Limited
				  liability partnership--A partnership registered pursuant to Revised Partnership
				  Act, Article 6132b-3.08, or Business Organizations Code, Title 4, Chapters 152
				  and 153, Subchapter H, or an equivalent statute in another
				  jurisdiction.
(13) Limited
				  partnership--A partnership formed pursuant to Revised Partnership Act, Article
				  6132a-1 or Business Organizations Code, Title 4, Chapter 153, or an equivalent
				  statute in another jurisdiction.
(14) Natural person--A human being or the
				  estate of a human being. The term does not include a purely legal entity given
				  recognition as the possessor of rights, privileges, and responsibilities, such
				  as a corporation, limited liability company, partnership, or trust.
(15) Partnership--A relationship referred to
				  in Business Organizations Code, §
											152.051, and
				  Revised Partnership Act, Article 6132b-2.02.
(16) Passive entity--A general or limited
				  partnership or trust other than a business trust that meets the qualifications
				  in Tax Code, §
											171.0003.
				  See also §
											3.582 of
				  this title (relating to Margin: Passive Entities).
(17) Professional association--An entity
				  organized under Professional Association Act, Article 1528e, or Business
				  Organizations Code, Title 7, Chapter 302, or an equivalent statute in another
				  jurisdiction.
(18) Qualified REIT
				  subsidiary--An entity as defined by Internal Revenue Code,
				  §856(i)(2).
(19) Real Estate
				  Investment Trust or REIT--An entity as defined by Internal Revenue Code,
				  §856.
(20) Real Estate
				  Mortgage Investment Conduit or REMIC--An entity as defined by Internal Revenue
				  Code, §860D.
(21) Savings and
				  loan association--A savings and loan association or savings bank, whether
				  organized under the laws of this state, another state, or another country, or
				  under federal law.
(22)
				  Self-insurance trust--A trust created and operated according to the provisions
				  of Insurance Code, Chapter 2212, or a predecessor statute.
(23) Sole proprietorship--A natural person
				  carrying on business, if the business is not formed in a manner that limits the
				  liability of the owner. It does not include other entities treated as sole
				  proprietorships for federal tax purposes, unless by statute the form of entity
				  does not afford limited liability protection to the owner and it does not
				  include single member limited liability companies.