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A BILL TO BE ENTITLED
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AN ACT
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relating to the inclusion by taxable entities and combined groups |
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that conduct certain oil and gas activities of certain costs in the |
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cost of goods sold for purposes of 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 (k-2) to read as follows: |
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(k-2) This subsection applies only to a taxable entity that |
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is primarily engaged in gathering, storing, transporting, or |
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processing products described by Industry Group 132, 461, 492, or |
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517 of the 1987 Standard Industrial Classification Manual published |
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by the federal Office of Management and Budget, except for a |
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refinery installation that manufactures finished petroleum |
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products from crude oil. Notwithstanding Subsection (e)(3) or (i) |
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or any other provision of this section, a taxable entity to which |
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this subsection applies may subtract as a cost of goods sold its |
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depreciation costs, its operation and maintenance costs, and |
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interest on its debt. If a taxable entity to which this subsection |
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applies is a member of a combined group that has elected under |
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Section 171.1014(d) to subtract cost of goods sold, the combined |
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group may elect to compute its costs of goods sold for purposes of |
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Section 171.1014(e) by adding together the depreciation costs and |
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operation and maintenance costs of each member. |
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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. |