Category Archives: Texas Comptroller Rules

Texas Supreme Court: Margin Tax Apportionment Rule Invalid

The Texas Supreme Court issued an opinion today in Hallmark Marketing Co., LLC v. Hegar. The opinion invalidated a Texas Comptroller rule regarding apportionment under the Texas franchise tax (also known as the Texas margin tax).  The rule required taxpayers to reduce net gains from sales of capital assets and investments by the amount of […]

Texas Judge Rules Auto Repair Labor Costs Includible in Cost of Goods Sold for Texas Franchise Tax Purposes

A Travis County District Court judge ruled on July 22, 2014 in Autohaus LP, LLP v. Combs that an auto dealer could include labor costs to install new and replacement auto parts in its cost of goods sold for Texas franchise tax purposes.  In doing so, the judge held that the Comptroller rule defining the […]

Third Court of Appeals Expands Aircraft Sales Tax Exemption

The Third Court of Appeals’ opinion in Cirrus Exploration Company v. Combs expands the number of businesses who may purchase aircraft without paying Texas sales and use tax.  In doing so, the Third Court of Appeals once again rejected a long-standing Texas Comptroller policy that imposed additional requirements not found in the Texas Tax Code […]

What DOMA’s Demise Means for the Texas Franchise Tax

The U.S. Supreme Court’s recent decision in U.S. v. Windsor raises many questions for the world of tax.  The decision invalidated the portion of the Defense of Marriage Act (DOMA) that defines “marriage” only as a union between a man and a woman for federal purposes.  However, the decision did not invalidate the portion of […]

Texas Tax Appellate Court Decisions: The Year in Review

This post takes a quick look at the decisions regarding Texas sales and use tax and Texas franchise tax that the Texas Supreme Court and Texas Courts of Appeals have handed down in the past year.  While this blog has already discussed some of these, now is a good time to revisit them in light […]

Major Change to Texas Franchise Tax Cost of Goods Sold Rule Finalized

The Texas Comptroller just adopted a major revision to the Texas franchise tax cost of goods sold rule.  The final rule the Texas Comptroller adopted is basically the same as the proposed cost of goods sold rule Michael described in his earlier post.  I’ll describe the ways the Texas Comptroller’s final cost of goods sold […]

Court Decision May Make Texas Sales and Use Tax Refund Claims Easier to File

A recent Travis County District Court decision steps back the Texas Comptroller’s efforts to make it more difficult for taxpayers to file Texas sales and use tax refund claims.  The case is Ryan, LLC v. Combs, Docket No. D-1-GN-12-002388.  Judge Amy Clark Meachum issued a final order in the case on May 10, 2013 that […]

Major Change in the Works for Texas Franchise Tax Cost of Goods Sold Rules

Last Friday, the Texas Comptroller posted to the Texas Register a proposed revision to her Rule 3.588, which explains how to calculate COGS (cost of goods sold) for Texas franchise tax purposes. The Comptroller appears ready to significantly expand which costs are included in the cost of goods sold deduction.

Not Much Deference to the Comptroller From the Courts These Days

Over the last few weeks, Texas courts haven’t been giving much deference to the Texas Comptroller—at least, not to her administrative rules. Two courts have determined that certain Comptroller rules are unnecessary at best, and invalid at worse. One of those courts was the Texas Supreme Court. The Roark Case and the Texas Sales Tax […]


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