83R22880 BEF-D

By: N. Gonzalez of El Paso, Button H.B. No. 1722

Substitute the following for H.B. No. 1722:

By: Hilderbran C.S.H.B. No. 1722

A BILL TO BE ENTITLED

AN ACT

relating to the amount of indirect or administrative overhead costs that a taxable entity may subtract as a cost of goods sold under the franchise tax.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 171.1012(f), Tax Code, is amended to read as follows:

(f) A taxable entity may subtract as a cost of goods sold indirect or administrative overhead costs, including all mixed service costs, such as security services, legal services, data processing services, accounting services, personnel operations, and general financial planning and financial management costs, that it can demonstrate are allocable to the acquisition or production of goods, except that the amount subtracted may not exceed 5.5 [four] percent of the taxable entity's total indirect or administrative overhead costs, including all mixed service costs. Any costs excluded under Subsection (e) may not be subtracted under this subsection.

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, 2014.