bill nets overpayments against underpayments before tax interest math

The text as introduced · 639 words

89R3837 CJD-F

By: Troxclair
H.B. No. 3994

A BILL TO BE ENTITLED

AN ACT

relating to the computation of certain tax penalties and interest

amounts.

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

SECTION 1. Section 111.060, Tax Code, is amended by

amending Subsection (a) and adding Subsection (e) to read as

follows:

(a) Subject to Subsection (e), the [ The ] yearly interest

rate on all delinquent taxes imposed by this title is at the rate of

12 percent for report periods originally due on or before December

31, 1999, after which the rate of interest is variable and

determined as provided in Subsection (b).

(e) For the purpose of computing interest under this

section, the amount of delinquent tax is the amount that remains due

after deducting any overpayments of the same tax made by the

taxpayer:

(1) for the same period during which the delinquent

tax was originally due; or

(2) for a period preceding the period described by

Subdivision (1).

SECTION 2. Section 111.061, Tax Code, is amended by adding

Subsection (d) to read as follows:

(d) For the purpose of computing penalties under this

section, the amount of tax due is the amount that remains due after

deducting any overpayments of the same tax made by the taxpayer:

(1) for the same period during which the failure to pay

the tax or file the report or other grounds for the penalty

occurred; or

(2) for a period preceding the period described by

Subdivision (1).

SECTION 3. Section 111.064, Tax Code, is amended by

amending Subsection (a) and adding Subsection (a-1) to read as

follows:

(a) Except as otherwise provided by this section, for a

refund under this chapter, interest is at the rate that is the

lesser of the annual rate of interest earned on deposits in the

state treasury during November of the previous calendar year, as

determined by the comptroller, or the rate set in Section 111.060,

and accrues on the amount of an overpayment or erroneous payment

that remains after deducting any underpayments under Subsection

(a-1) [ found to be erroneously paid ] for a period:

(1) beginning on the later of 60 days after the date of

payment or the due date of the tax report; and

(2) ending on, as determined by the comptroller,

either the date of allowance of credit on account of the

comptroller's final decision or audit or a date not more than 10

days before the date of the refund warrant.

(a-1) For the purpose of computing interest under

Subsection (a) for an overpayment or erroneous payment of tax, the

amount of the overpayment or erroneous payment is the amount that

remains after deducting any underpayments of the same tax made by

the taxpayer:

(1) for the same period during which the tax that was

overpaid or erroneously paid was originally due; or

(2) for a period preceding the period described by

Subdivision (1).

SECTION 4. Section 151.508, Tax Code, is amended to read as

follows:

Sec. 151.508. OFFSETS. In making a determination, the

comptroller shall [ may ] offset an overpayment for one or more

periods against an underpayment, penalty, and interest accrued on

the underpayment for the same period or one or more other periods.

Any interest accrued on the overpayment shall be included in the

offset.

SECTION 5. The amendments made by this Act are

clarifications of existing law and do not imply that existing law

may be construed as inconsistent with the law as amended by this

Act.

SECTION 6. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.