Texas Tax Code
§ 171.063 — EXEMPTION-NONPROFIT CORPORATION EXEMPT FROM FEDERAL INCOME TAX
TX § 171.063Title 2. STATE TAXATION · Part F. FRANCHISE TAX; CREDITS · Ch. 171. FRANCHISE TAX · Art. B. EXEMPTIONS
Statute text
View on source(a)The following corporations are exempt from the franchise tax:
(1)a nonprofit corporation exempted from the federal income tax under Section 501(c)(3), (4), (5), (6), (7), (8), (10), or (19), Internal Revenue Code which in the case of a nonprofit hospital means a hospital providing community benefits that include charity care and government-sponsored indigent health care as set forth in Subchapter D, Chapter 311, Health and Safety Code;
(2)a corporation exempted under Section 501(c)(2) or (25), Internal Revenue Code, if the corporation or corporations for which it holds title to property is either exempt from or not subject to the franchise tax; and
(3)a corporation exempted from federal income tax under Section 501(c)(16), Internal Revenue Code.
(b)A corporation is entitled to an exemption under this section based on the corporation's exemption from the federal income tax if the corporation files with the comptroller evidence establishing the corporation's exemption.
(c)A corporation's exemption under Subsection (b) of this section is established by furnishing the comptroller with a copy of the Internal Revenue Service's letter of exemption issued to the corporation.
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Legislative history
Acts 2015, 84th Leg., R.S., Ch. 329 (S.B. 1049), Sec. 5, eff. January 1, 2016. Acts 2015, 84th Leg., R.S., Ch. 329 (S.B. 1049), Sec. 6, eff. January 1, 2020. Acts 2021, 87th Leg., R.S., Ch. 859 (S.B. 938), Sec. 6, eff. January 1, 2022. Acts 2021, 87th Leg., R.S., Ch. 859 (S.B. 938), Sec. 7, eff. January 1, 2026. Acts 2025, 89th Leg., R.S., Ch. 335 (H.B. 346), Sec. 2(2), eff. September 1, 2025.