Texas Franchise Tax: New Sourcing Rule, COGS Calculations, Entity Issues, and Combined Reporting

Note: CLE credit is not offered on this program

A live 110-minute CPE webinar with interactive Q&A


Tuesday, May 18, 2021

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, April 23, 2021

or call 1-800-926-7926

This webinar will provide a guide to various compliance requirements and planning opportunities related to the Texas Franchise Tax. The program will discuss options for calculating and reporting the most challenging aspects of the tax, including new sourcing regulations, identifying Texas cost of goods sold, apportioning margin to Texas, identifying and claiming franchise tax credits, issues particular to partnerships and LLCs, and combined reporting questions.

Description

The Texas Franchise Tax remains one of the most complex and controversial state business taxes in the entire country. The tax is essentially based on gross receipts but is complicated by both entity identification and computational challenges. This margin calculation has routinely been the subject of numerous lawsuits partially due to its complexity and structure.

New rules published in January 2021 create situational variances between revenue and gross receipts. In a move toward market-based sourcing, these changes affect general services, telecommunications, advertising, internet hosting, investments, financial derivatives, the sale of single-member LLC interests, and other businesses doing business with Texas.

Most legal entities doing business in Texas--and enjoying some form of limited liability protection--may be subject to this tax. Taxpayers subject to the tax include corporations, limited partnerships, limited liability companies, and limited liability partnerships. Only qualifying general partnerships and sole proprietorships escape taxation under the regime.

Listen as our panel identifies compliance challenges and planning opportunities related to the Texas Franchise Tax.

READ MORE

Outline

  1. Introduction
  2. January 2021 amendments to 34 Tex. Admin. Code Section 3.591
  3. Margin tax calculation options
  4. Issues in computing revenues
  5. 2020 changes to tax rates and structure
  6. Electing deductions
  7. Combined reporting and affiliated entities
  8. Other recent developments

Benefits

The panel will give you guidance to deal with these and other key issues:

  • Industry-specific issues, particularly concerning the cost of goods sold calculation
  • Identifying affiliates and addressing combined reporting issues
  • Tax base alternatives: identifying the method that will result in the lowest tax bill for your company
  • Mining tax planning opportunities: the apportionment formula, passive entities, maximizing deductions, and other areas
  • Anticipating tough audits: where the state is likely to challenge your business on the tax calculation, a unitary filing declaration, etc.

Faculty

Bowden, Jamie
Jamie Bowden

Senior Manager, Indirect Tax Services
Ernst & Young

Ms. Bowden is a senior manager in EY’s West Region Indirect (State and Local) Tax Practice where she serves...  |  Read More

Crow, Bill
Bill Crow, JD

Managing Partner
Energy Tax Advisors

Mr. Crow is Co-Managing Partner, General Counsel, and Tax Practice Leader for both income/franchise and property taxes...  |  Read More

Mondrik, Christina
Christina A. Mondrik, Esq., CPA

Attorney
Mondrik & Associates

Ms. Mondrik, focuses her practice on state and federal tax controversies and litigation. She is board certified in...  |  Read More

Attend on May 18

Early Discount (through 04/23/21)

CPE credit processing is available for an additional fee of $39.
CPE processing must be ordered prior to the event. See NASBA details.

Cannot Attend May 18?

Early Discount (through 04/23/21)

CPE credit is not available on downloads.

Download