Transcription of Issues Concerning the Margin Tax - TTARA
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Issues Concerning the Margin Tax - TTARA
Issues Concerning the Margin Tax The Texas Taxpayers and Research Association (512) 472-8838 This is a working draft of Issues and comments Concerning the conversion of the Texas franchise tax to tax based on Margin , as adopted by House Bill 3 of the 79th Legislature, 3rd Called Session. Computation of Tax Liability ( , , , & Section 18 of HB3) The Margin tax is calculated as follows: The lesser of: 70% of Total Revenues Or: Total Revenues less the greater of: Cost of Goods Sold (state definition), or Compensation Equals: Margin Multiply by: Percent of Gross Receipts in Texas Equals: Apportioned Margin Less: Allowable Deductions Equals: Taxable Margin Multiply by: Tax Rate ( or ) Equals: Taxable Margin Subtract: Tax Credits, including Economic Development Credits, and Temporary Credits Equals: Net Margin Tax Due An entity with less than $300,000 in total revenues or with a tax liability of less than $1,000 owes no tax.
Issues Concerning the Margin Tax The Texas Taxpayers and Research Association www.ttara.org (512) 472-8838 This is a working draft of issues and comments concerning the conversion of the Texas franchise
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