Navigating the Texas Margin Tax: RTFT Calculations, Entity Issues, Combined Reporting and Credit Optimizations

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, June 28, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide a guide to various compliance requirements and planning opportunities of the Texas Franchise Tax. The program will discuss options for calculating and report the most challenging aspects of the tax, including calculating margin, 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

A decade after its implementation, the Texas Franchise “Margin” Tax remains one of the most complex and controversial state business taxes in the entire country. Called “a failed experiment” by one tax advocacy group, the tax is essentially based on gross receipts test but is complicated by both entity identification and computational challenges. Since the new format was implemented in tax year 2007 covering financial accounting year 2006, the Margin calculation has routinely been the subject of challenges and numerous lawsuits partially due to its complexity and structure.

Any legal entity doing business in Texas—and enjoying some form of limited liability protection—must pay 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.

Texas lowered the tax rates in 2015 and made some alterations to the law which did not simplify the tax compliance requirements but did create some planning opportunities for companies.

Listen as our webinar identifies compliance challenges and planning opportunities of the Texas Franchise “Margin” Tax.

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Outline

  1. Margin tax calculation options
  2. Issues in computing revenues
  3. 2015 changes to tax rates and structure
  4. Electing deductions
  5. Combined reporting and affiliated entities
  6. Recent developments
  7. Compliance issues and case studies

Benefits

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

  • Industry specific issues, particularly with respect to 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—in the apportionment formula, passive entities, maximizing deductions, and other areas
  • Anticipating tough audits—where the state is likely to challenge your company on the tax calculation, a unitary filing declaration, etc.

Faculty

Karen Harriger Currie
Karen Harriger Currie

Partner
Jones Day

Ms. Currie's practice involves a wide range of tax matters. While her roots are in multistate taxation, she...  |  Read More

Bill Crow, JD
Bill Crow, JD

Chief Operating Officer
Dan Martinez & Associates

Mr. Crow brings over 21 years of multistate tax experience including tenure as an in-house tax counsel for a...  |  Read More

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

Mondrik & Associates

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

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