Petition for Writ of Mandamus - Filed - Supreme Court of Texas

TAX CODE CHAPTER 171. FRANCHISE TAX
http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.171.htm
Page 9 of 88
6/25/2012
more related entities.
(e) For purposes of this section:
(1) the ownership of a royalty interest or a nonoperating
working interest in mineral rights does not constitute conduct of an
active trade or business;
(2) payment of compensation to employees or independent
contractors for financial or legal services reasonably necessary for
the operation of the entity does not constitute conduct of an active
trade or business; and
(3) holding a seat on the board of directors of an entity
does not by itself constitute conduct of an active trade or business.
Amended by:
Acts 2006, 79th Leg., 3rd C.S., Ch. 1, Sec. 2, eff. January 1,
2008.
Acts 2007, 80th Leg., R.S., Ch. 1282, Sec. 4, eff. January 1,
2008.
Sec. 171.001. 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.
(c) The tax imposed under this section or Section 171.0011 is
not imposed on an entity if, during the period on which the report is
based, the entity qualifies as a passive entity as defined by Section
171.0003.
Acts 1981, 67th Leg., p. 1691, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Amended by Acts 1991, 72nd Leg., ch. 901, Sec. 53(a), eff. Aug. 26,
1991; Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 8.01, eff. Jan. 1,
1992; Acts 1993, 73rd Leg., ch. 765, Sec. 7, eff. Aug. 30, 1993;
Acts 1995, 74th Leg., ch. 914, Sec. 12, eff. Sept. 1, 1995; Acts
1995, 74th Leg., ch. 1002, Sec. 1, eff. Jan. 1, 1996; Acts 1997, 75th
Leg., ch. 1185, Sec. 1, eff. Jan. 1, 1998; Acts 1999, 76th Leg., ch.
184, Sec. 1, eff. Jan. 1, 2000; Acts 2003, 78th Leg., ch. 209, Sec.
31, 32, eff. Oct. 1, 2003.
Amended by: