Texas Comptroller of Public Accounts    STAR System


9203R1163E13



STAR SUPERSEDED WITHOUT SUMMARY 

Accession No.(s): 9203R1163E13

Document superseded on: 08/15/2013 



STATE OF TEXAS
COMPTROLLER OF PUBLIC ACCOUNTS
FRANCHISE TAX

Rule 3.552. Taxable Capital: In Process of Liquidation.

(a) A corporation in the process of liquidation is required to pay the taxable 
capital component of the franchise tax only upon its issued capital stock, less 
liquidating dividends actually paid to the stockholders. Both the president and 
secretary must, however, execute and file with each tax report filed during the 
period of liquidation an affidavit stipulating that the corporation is in a 
bona fide state of liquidation and also stating the amount of issued capital 
stock and the amount and date(s) of liquidating dividends actually paid to the 
stockholders. There also must be filed with the first tax report due after 
entering into the state of liquidation a copy of the plan of liquidation as 
adopted and ratified by a majority vote of the stockholders. A corporation may 
gain the benefits of the reduced taxable capital for an annual report if it 
enters a bona fide state of liquidation prior to January 1 of the reporting 
year. A corporation may gain the benefits of the reduced taxable capital for an 
initial report if it enters a bona fide state of liquidation prior to the first 
anniversary date of its charter or doing business in Texas or obtaining a 
certificate of authority, whichever one is applicable. If liquidating dividends 
paid prior to January 1 or the first anniversary date of any reporting year 
exceed the amount of issued capital stock, the corporation thereafter will have 
zero for the taxable capital component of the franchise tax.

(b) The terms "process of liquidation" and "bona fide state of liquidation" do 
not include the dissolution of a corporation by merger or consolidation with 
another corporation. The terms mean that the corporation in good faith has 
begun liquidating for the purpose of winding up its business affairs and 
terminating its legal existence. If the corporation does not terminate its 
business affairs and dissolve the corporation in accordance with the plan of 
liquidation, the corporation shall be liable for the difference in the amount 
of tax reported and paid pursuant to the plan of liquidation and the amount of 
tax that otherwise should have been reported and paid, plus applicable 
penalties and interest on such difference.


Effective Date: March 16, 1992
Filed with Secretary of State: February 24, 1992


 
Comptroller of Public Accounts




ACCESSION NUMBER: 9203R1163E13   
SUPERSEDED: Y 
DOCUMENT TYPE: R 
DATE: 03/16/1992
TAX TYPE: FRANCHISE