Bill Text: TX HB891 | 2011-2012 | 82nd Legislature | Introduced

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Bill Title: Relating to the computation of cost of goods sold for purposes of the franchise tax by certain affiliated taxable entities.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2011-02-24 - Referred to Ways & Means [HB891 Detail]

Download: Texas-2011-HB891-Introduced.html

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82R2567 JE-F
By: Howard of Fort Bend H.B. No. 891

A BILL TO BE ENTITLED
AN ACT
relating to the computation of cost of goods sold for purposes of
the franchise tax by certain affiliated taxable entities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.1012(l), Tax Code, is amended to
read as follows:
(l) Notwithstanding any other provision of this section, a
payment made by one member of an affiliated group to another member
of that affiliated group not included in the combined group may be
subtracted as a cost of goods sold [only] if it is a transaction
made at arm's length. If the related-party transaction is not made
at arm's length:
(1) the purchasing member may subtract as a cost of
goods sold an amount not to exceed the market value of the
transaction; and
(2) the selling member may include in the selling
member's gross receipts for purposes of Sections 171.103, 171.105,
171.1055, and 171.106 an amount not to exceed the market value of
the transaction.
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, 2012.