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A BILL TO BE ENTITLED
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AN ACT
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relating to the determination of cost of goods sold for purposes of |
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computing the franchise tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.1012, Tax Code, is amended by adding |
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Subsection (q) to read as follows: |
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(q) Subject to Section 171.1014, a taxable entity that |
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elects to subtract cost of goods sold for the purpose of computing |
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its taxable margin may, instead of determining its cost of goods |
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sold in accordance with the other provisions of this section, elect |
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to determine cost of goods sold as follows: |
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(1) for a taxable entity treated for federal income |
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tax purposes as a corporation, the cost of goods sold is the amount |
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reportable as cost of goods sold on line 2, Internal Revenue Service |
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Form 1120; |
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(2) for a taxable entity treated for federal income |
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tax purposes as a partnership, the cost of goods sold is the amount |
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reportable as cost of goods sold on line 2, Internal Revenue Service |
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Form 1065; |
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(3) for a taxable entity treated for federal income |
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tax purposes as an S corporation, the cost of goods sold is the |
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amount reportable as cost of goods sold on line 2, Internal Revenue |
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Service Form 1120S; or |
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(4) for any other taxable entity, the cost of goods |
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sold is an amount determined in a manner substantially equivalent |
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to the amount for Subdivision (1), (2), or (3) determined by rules |
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the comptroller shall adopt. |
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SECTION 2. This Act applies only to a report originally due |
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on or after the effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2010. |