Texas 2009 - 81st Regular

Texas House Bill HB2485 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R9666 CBH-D
2	2	By: King of Parker H.B. No. 2485
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the inclusion of gas and electric transmission and
8	8	distribution costs in the cost of goods sold for purposes of the
9	9	franchise tax.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Sections 171.1012(c) and (e), Tax Code, are
12	12	amended to read as follows:
13	13	(c) The cost of goods sold includes all direct costs of
14	14	acquiring or producing the goods, including:
15	15	(1) labor costs;
16	16	(2) cost of materials that are an integral part of
17	17	specific property produced;
18	18	(3) cost of materials that are consumed in the
19	19	ordinary course of performing production activities;
20	20	(4) handling costs, including costs attributable to
21	21	processing, assembling, repackaging, and inbound transportation
22	22	costs;
23	23	(5) storage costs, including the costs of carrying,
24	24	storing, or warehousing property, subject to Subsection (e);
25	25	(6) depreciation, depletion, and
26	26	amortization, reported on the federal income tax return on which
27	27	the report under this chapter is based, to the extent associated
28	28	with and necessary for the production of goods, including recovery
29	29	described by Section 197, Internal Revenue Code;
30	30	(7) the cost of renting or leasing equipment,
31	31	facilities, or real property directly used for the production of
32	32	the goods, including pollution control equipment and intangible
33	33	drilling and dry hole costs;
34	34	(8) the cost of repairing and maintaining equipment,
35	35	facilities, or real property directly used for the production of
36	36	the goods, including pollution control devices;
37	37	(9) costs attributable to research, experimental,
38	38	engineering, and design activities directly related to the
39	39	production of the goods, including all research or experimental
40	40	expenditures described by Section 174, Internal Revenue Code;
41	41	(10) geological and geophysical costs incurred to
42	42	identify and locate property that has the potential to produce
43	43	minerals;
44	44	(11) taxes paid in relation to acquiring or producing
45	45	any material, or taxes paid in relation to services that are a
46	46	direct cost of production;
47	47	(12) the cost of producing or acquiring electricity
48	48	sold;
49	49	(12-a) transmission or distribution costs relating to:
50	50	(A) electricity sold by an electric utility,
51	51	retail electric provider, or power marketer, as those terms are
52	52	defined by Section 31.002, Utilities Code; or
53	53	(B) natural gas sold by a gas utility, as that
54	54	term is defined by Section 101.003 or 121.001, Utilities Code; and
55	55	(13) a contribution to a partnership in which the
56	56	taxable entity owns an interest that is used to fund activities, the
57	57	costs of which would otherwise be treated as cost of goods sold of
58	58	the partnership, but only to the extent that those costs are related
59	59	to goods distributed to the taxable entity as goods-in-kind in the
60	60	ordinary course of production activities rather than being sold.
61	61	(e) The cost of goods sold does not include the following
62	62	costs in relation to the taxable entity's goods:
63	63	(1) the cost of renting or leasing equipment,
64	64	facilities, or real property that is not used for the production of
65	65	the goods;
66	66	(2) selling costs, including employee expenses
67	67	related to sales;
68	68	(3) distribution costs, including outbound
69	69	transportation costs, but not including transmission or
70	70	distribution costs described by Subsection (c)(12-a);
71	71	(4) advertising costs;
72	72	(5) idle facility expense;
73	73	(6) rehandling costs;
74	74	(7) bidding costs, which are the costs incurred in the
75	75	solicitation of contracts ultimately awarded to the taxable entity;
76	76	(8) unsuccessful bidding costs, which are the costs
77	77	incurred in the solicitation of contracts not awarded to the
78	78	taxable entity;
79	79	(9) interest, including interest on debt incurred or
80	80	continued during the production period to finance the production of
81	81	the goods;
82	82	(10) income taxes, including local, state, federal,
83	83	and foreign income taxes, and franchise taxes that are assessed on
84	84	the taxable entity based on income;
85	85	(11) strike expenses, including costs associated with
86	86	hiring employees to replace striking personnel, but not including
87	87	the wages of the replacement personnel, costs of security, and
88	88	legal fees associated with settling strikes;
89	89	(12) officers' compensation;
90	90	(13) costs of operation of a facility that is:
91	91	(A) located on property owned or leased by the
92	92	federal government; and
93	93	(B) managed or operated primarily to house
94	94	members of the armed forces of the United States; and
95	95	(14) any compensation paid to an undocumented worker
96	96	used for the production of goods. As used in this subdivision:
97	97	(A) "undocumented worker" means a person who is
98	98	not lawfully entitled to be present and employed in the United
99	99	States; and
100	100	(B) "goods" includes the husbandry of animals,
101	101	the growing and harvesting of crops, and the severance of timber
102	102	from realty.
103	103	SECTION 2. This Act applies only to a report originally due
104	104	on or after the effective date of this Act.
105	105	SECTION 3. This Act takes effect January 1, 2010.