A June 2012 policy statement issued by the Comptroller notified taxpayers of a change in policy regarding amending franchise tax reports to select a different deduction. Under prior law and policy, a taxpayer that filed a franchise tax report electing the cost of goods sold deduction could not amend the report to take the compensation [...]
Evidently the Comptroller is still grappling with many businesses in the service industry incorrectly electing to take a cost of goods sold deduction on their franchise tax reports. In her July 2010 Tax Policy News, the Comptroller reminds Texas taxpayers that "service industry entities generally do not qualify for the cost of goods sold deduction." [...]
The Comptroller issued a letter ruling stating that lending institutions that offer loans to the public may subtract as a cost of goods sold an amount equal to the interest expense on its loans. The letter also concludes that a motor vehicle financing company qualifies as a lending institution for this policy. You can review [...]
