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A BILL TO BE ENTITLED
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AN ACT
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relating to the computation of cost of goods sold for purposes of |
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the franchise tax by certain affiliated taxable entities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.1012(l), Tax Code, is amended to |
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read as follows: |
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(l) Notwithstanding any other provision of this section, a |
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payment made by one member of an affiliated group to another member |
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of that affiliated group not included in the combined group may be |
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subtracted as a cost of goods sold [only] if it is a transaction |
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made at arm's length. If the related-party transaction is not made |
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at arm's length: |
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(1) the purchasing member may subtract as a cost of |
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goods sold an amount not to exceed the market value of the |
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transaction; and |
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(2) the selling member may include in the selling |
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member's gross receipts for purposes of Sections 171.103, 171.105, |
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171.1055, and 171.106 an amount not to exceed the market value of |
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the transaction. |
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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. |