Bill Text: TX HB2939 | 2015-2016 | 84th Legislature | Introduced
Bill Title: Relating to the deduction of certain officers' compensation as a cost of goods sold for purposes of the franchise tax.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-03-16 - Referred to Ways & Means [HB2939 Detail]
Download: Texas-2015-HB2939-Introduced.html
84R13303 BEF-F | ||
By: Capriglione | H.B. No. 2939 |
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relating to the deduction of certain officers' compensation as a | ||
cost of goods sold for purposes of the franchise tax. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 171.1012(e), Tax Code, is amended to | ||
read as follows: | ||
(e) The cost of goods sold does not include the following | ||
costs in relation to the taxable entity's goods: | ||
(1) the cost of renting or leasing equipment, | ||
facilities, or real property that is not used for the production of | ||
the goods; | ||
(2) selling costs, including employee expenses | ||
related to sales; | ||
(3) distribution costs, including outbound | ||
transportation costs; | ||
(4) advertising costs; | ||
(5) idle facility expense; | ||
(6) rehandling costs; | ||
(7) bidding costs, which are the costs incurred in the | ||
solicitation of contracts ultimately awarded to the taxable entity; | ||
(8) unsuccessful bidding costs, which are the costs | ||
incurred in the solicitation of contracts not awarded to the | ||
taxable entity; | ||
(9) interest, including interest on debt incurred or | ||
continued during the production period to finance the production of | ||
the goods; | ||
(10) income taxes, including local, state, federal, | ||
and foreign income taxes, and franchise taxes that are assessed on | ||
the taxable entity based on income; | ||
(11) strike expenses, including costs associated with | ||
hiring employees to replace striking personnel, but not including | ||
the wages of the replacement personnel, costs of security, and | ||
legal fees associated with settling strikes; | ||
(12) officers' compensation that is not compensation | ||
for direct labor; | ||
(13) costs of operation of a facility that is: | ||
(A) located on property owned or leased by the | ||
federal government; and | ||
(B) managed or operated primarily to house | ||
members of the armed forces of the United States; and | ||
(14) any compensation paid to an undocumented worker | ||
used for the production of goods. As used in this subdivision: | ||
(A) "undocumented worker" means a person who is | ||
not lawfully entitled to be present and employed in the United | ||
States; and | ||
(B) "goods" includes the husbandry of animals, | ||
the growing and harvesting of crops, and the severance of timber | ||
from realty. | ||
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, 2016. |