Credits/Incentives:
Texas: Changes to Franchise Tax and Sales Tax Research and Development Rules Adopted
Amended Tex. Admin. Code tit. 34 section 3.599 and Amended Tex. Admin. Code tit. 34 Section 3.340, Tex. Comptroller (eff. 8/4/22). The Texas Comptroller of Public Accounts (Comptroller) adopted regulatory amendments that provide additional guidance and clarification on the Texas franchise tax research and development (R&D) activities credit and the sales/use tax R&D exemption [see previously issued Multistate Tax Alert for 2021 amendments to these same rules]. Among the adopted changes are amendments to the definition of “Internal Revenue Code” to ultimately expand the federal Treasury Regulations applicable to the 2011 federal income tax year; the Comptroller has noted such changes are in direct response to comments received during the Comptroller’s 2021 rulemaking process. Other adopted changes include guidance on determining the R&D credit carryforward when the combined franchise tax group changes, as well as eliminating certain “internal use software” examples. Please contact us with any questions.
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