85R8922 GRM-D
By: White H.B. No. 1365
A BILL TO BE ENTITLED
AN ACT
relating to the computation of cost of goods sold for purposes of
the franchise tax by taxable entities primarily engaged in the
business of harvesting trees for wood.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.1012, Tax Code, is amended by adding
Subsection (p) to read as follows:
(p) Notwithstanding Subsection (i) or any other provision
of this section, a taxable entity that is primarily engaged in the
business of harvesting trees for wood may subtract as cost of goods
sold the direct costs of acquiring or producing the timber for the
wood that are specified by this subsection or otherwise described
by this section, regardless of whether the taxable entity owns the
land from which the trees are harvested, the harvested timber, or
the wood resulting from the harvested timber. For purposes of this
subsection, direct costs include costs of:
(1) moving harvesting equipment;
(2) severing timber;
(3) transporting timber to and from a mill or
designated delivery point;
(4) obtaining, using, storing, or maintaining
equipment necessary for an activity described by Subdivision (1),
(2), or (3); and
(5) other supplies, labor, freight, and fuel necessary
for an activity described by Subdivision (1), (2), or (3).
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, 2018.