Texas Comptroller of Public Accounts    STAR System


200211597R



STAR SUPERSEDED WITHOUT SUMMARY 

Accession No.(s): 200211597R

Document superseded on: 08/15/2013 



STATE OF TEXAS
COMPTROLLER OF PUBLIC ACCOUNTS
FRANCHISE TAX

Section 3.560. Banking Corporations.


(a)  Effective date.  Except as otherwise provided in this section, the 
provisions of this section apply to franchise tax reports originally due on or 
after January 1, 1992. 

(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 (bank)--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 
the Federal Reserve Act, sec. 25(a), (12 United States Code, secs. 611-631) 
(edge corporations), but does not include a bank holding company as that term 
is defined by the Bank Holding Company Act of 1956 (12 United States Code, sec. 
1841). 

(2)  Commercial domicile--The principal place from which the trade or business 
of the entity is directed. 

(3)  Correspondent bank--a United States depository institution or foreign 
bank, as defined by 12 C.F.R. sec. 206.2(e), that accepts deposits of and/or 
performs banking services for insured depository institutions, and to which 
insured depository institutions have interbank liabilities regulated by 12 
C.F.R. secs. 206.1 et seq.  The term "correspondent bank" does not include a 
depository institution or foreign bank that is commonly controlled with the 
insured depository institution.  

(4)  Legal domicile-The legal domicile of a corporation is its state of 
incorporation. The legal domicile of a partnership or trust is the principal 
place of business of the partnership or trust.  The principal place of business 
of a partnership or trust is the location of its day-to-day operations.  Where 
the day-to-day operations are conducted equally or fairly evenly in more than 
one state, the principal place of business is the commercial domicile. 

(c)  Banking corporations subject to franchise tax. 

(1)  All banking corporations that are chartered or that do business in Texas 
beginning May 1, 1985, are subject to franchise tax, except those banks that 
are specifically listed in subsection (d) of this section. 

(2)  Beginning January 1, 1996, the following banking corporations are subject 
to Texas franchise tax: 

(A)  non-Texas banking corporations doing business in Texas solely in a 
fiduciary capacity and registered with the Texas Secretary of State's Office 
under the Probate Code, sec. 105A; and 

(B)  banking corporations doing business solely on federal enclaves in Texas. 

(3)  For those banking corporations subject to tax pursuant to paragraph (2) of 
this subsection, January 1, 1996, is considered the banking corporation's 
beginning date for purposes of determining the banking corporation's privilege 
periods and for all other purposes of the Tax Code, Chapter 171. 

(d)  Banks not subject to tax.  Unincorporated private banks, other than 
limited banking associations, doing business in Texas are not subject to Texas 
franchise tax. 

(e)  Other franchise tax provisions apply. All provisions of this subchapter 
concerning the Texas franchise tax are applicable to banking corporations.  
However, this section will control if it conflicts with another section of this 
subchapter. 

(f)  Apportionment of dividends and interest. 

(1)  This paragraph applies to franchise tax reports originally due before 
January 1, 2000. If a banking corporation has its commercial domicile in Texas, 
all dividends and interest received, including interest from the federal 
government unless otherwise excluded by sec. 3.555(k) of this title (relating 
to Earned Surplus: Computation), are considered to be Texas gross receipts and 
gross receipts everywhere. If a banking corporation's commercial domicile is 
not in Texas, no dividends or interest received are considered to be Texas 
gross receipts but all are considered to be gross receipts everywhere, unless 
otherwise specifically excluded from the receipts factor. 

(2)  For reports originally due on or after January 1, 2000, a banking 
corporation's dividends and/or interest are apportioned to the legal domicile 
of the payor.  See sec. 3.549(e)(13) of this title (relating to Taxable 
Capital: Apportionment) and sec. 3.557(e)(13) of this title (relating to Earned 
Surplus: Apportionment) for additional information on apportioning dividends 
and interest. 

(3)  For reports that are originally due on or after January 1, 2002, a banking 
corporation may exclude from its Texas gross receipts interest that is earned 
on federal funds and interest that is earned on securities that are sold under 
an agreement to repurchase and that are held in a correspondent bank that is 
domiciled in Texas, but the banking corporation must include the interest in 
its gross receipts everywhere.  

(g)  Earned surplus.  Regarding the add-back of compensation of executive 
officers and directors of banking corporations and directors, managers, and 
participants of a limited banking association, see sec. 3.558 of this title 
(relating to Earned Surplus: Officer and Director Compensation). 

(h)  Enforcement. 

(1)  All taxes, penalties, and interest due by a banking corporation are 
secured by a lien on all of the bank's property that is subject to execution.  
The lien attaches to all of the property of the bank liable for the taxes. 

(2)  The attorney general may bring suit in the name of the state to recover 
delinquent taxes, penalties, and interest. 

(3)  The banking commissioner shall appoint a conservator under the Finance 
Code, Title 3, Subtitle A, to pay the franchise tax of a banking corporation 
that is organized under the laws of Texas and that the commissioner certifies 
as being delinquent in the payment of the corporation's franchise tax. 

(4)  Except as provided in paragraph (3) of this subsection, a banking 
corporation that is organized under the laws of Texas or under federal law and 
has its main office in Texas will not have its corporate privileges forfeited 
by the comptroller for not paying its franchise tax. 

(5)  A banking corporation that is organized under the laws of Texas or under 
federal law and has its main office in Texas will not have its charter 
forfeited for not paying its franchise tax.


Effective Date:  November 21, 2002.
Filed with Secretary of State:  November 1, 2002.







ACCESSION NUMBER: 200211597R   
SUPERSEDED: Y 
DOCUMENT TYPE: R 
DATE: 11/21/2002 
TAX TYPE: FRANCHISE