81R10298 KLA-F
By: Howard of Fort Bend H.B. No. 4268
A BILL TO BE ENTITLED
AN ACT
relating to the determination of cost of goods sold for purposes of
computing the franchise tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.1012, Tax Code, is amended by adding
Subsection (q) to read as follows:
(q) Subject to Section 171.1014, a taxable entity that
elects to subtract cost of goods sold for the purpose of computing
its taxable margin may, instead of determining its cost of goods
sold in accordance with the other provisions of this section, elect
to determine cost of goods sold as follows:
(1) for a taxable entity treated for federal income
tax purposes as a corporation, the cost of goods sold is the amount
reportable as cost of goods sold on line 2, Internal Revenue Service
Form 1120;
(2) for a taxable entity treated for federal income
tax purposes as a partnership, the cost of goods sold is the amount
reportable as cost of goods sold on line 2, Internal Revenue Service
Form 1065;
(3) for a taxable entity treated for federal income
tax purposes as an S corporation, the cost of goods sold is the
amount reportable as cost of goods sold on line 2, Internal Revenue
Service Form 1120S; or
(4) for any other taxable entity, the cost of goods
sold is an amount determined in a manner substantially equivalent
to the amount for Subdivision (1), (2), or (3) determined by rules
the comptroller shall adopt.
SECTION 2. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2010.