If you think a proposed rule will affect you or your clients, don't hesitate to ask us for a copy and to send us your comments. We repealed this rule so that it can be replaced with a new Rule 3.560, concerning banking corporations. This proposed amendment reflects changes in the tax law made by Senate Bills 373 and 644, 74th Legislature and also conforms with existing policy the definitions of corporations qualifying for franchise tax exemption as religious, educational or charitable. The proposed new rule provides information concerning annual report extension requirements for corporations that are required by law to pay their franchise tax by electronic funds transfer. 171.1061 and applies to reports originally due on or after January 1, 1994.
All income is presumed to be unitary income.
Income may only be allocated when it is an investment. If Texas is the corporation's commercial domicile and it is determined that an item of income is non-unitary, with the exception of dividends and interest, the income, less related expenses, will be allocated to Texas. Conversely, if the corporation's commercial domicile is not in Texas and an item of income is non-unitary and is not allocated to Texas, the allocation must be less related expenses. Non-unitary income and its related expenses must be excluded in determining apportioned earned surplus. This proposed amendment clarifies the definitions of charitable, educational or religious organizations that qualify for exemption from hotel tax.