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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 taxable entities primarily engaged in the |
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business of harvesting trees for wood. |
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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) Notwithstanding Subsection (i) or any other provision |
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of this section, a taxable entity that is primarily engaged in the |
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business of harvesting trees for wood may subtract as cost of goods |
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sold the direct costs of acquiring or producing the timber for the |
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wood that are specified by this subsection or otherwise described |
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by this section, regardless of whether the taxable entity owns the |
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land from which the trees are harvested, the harvested timber, or |
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the wood resulting from the harvested timber. For purposes of this |
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subsection, direct costs include costs of: |
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(1) moving harvesting equipment; |
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(2) severing timber; |
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(3) transporting timber to and from a mill or |
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designated delivery point; |
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(4) obtaining, using, storing, or maintaining |
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equipment necessary for an activity described by Subdivision (1), |
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(2), or (3); and |
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(5) other supplies, labor, freight, and fuel necessary |
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for an activity described by Subdivision (1), (2), or (3). |
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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, 2014. |