Texas Tax Code 171.559 – Allocation of Credit
(a) If a taxable entity receiving a credit under this subchapter is a partnership, limited liability company, S corporation, or similar pass-through entity, the taxable entity may allocate the credit to its partners, shareholders, members, or other constituent taxable entities in any manner agreed to by those entities, regardless of the size of the person‘s ownership interest. This section does not prohibit a partner, member, or shareholder from holding an investment consisting only of a credit awarded under this subchapter or a federal tax credit.
(b) A taxable entity that makes an allocation under this section shall certify to the comptroller the amount of credit allocated to each constituent taxable entity or shall notify the comptroller that it has delegated the duty of certification to one constituent taxable entity that shall provide the notification to the comptroller. Each constituent taxable entity is entitled to claim the allocated amount subject to any restrictions prescribed by this subchapter.
Terms Used In Texas Tax Code 171.559
- Comptroller: means the Comptroller of Public Accounts of the State of Texas. See Texas Tax Code 1.04
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
(c) An allocation under this section is not a transfer for purposes of state law.