Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter V - FRANCHISE TAX › Section 3.583 - Margin: Exemptions

Current through Reg. 49, No. 28; July 12, 2024
(a) Effective date.
				  This section applies to franchise tax reports originally due on or after
				  January 1, 2008, except as otherwise noted.
(b) Application for exemption. An entity that
				  has not previously established an exemption from franchise tax with the
				  comptroller must apply for an exemption. An entity that is not a corporation,
				  but whose activities would qualify it for a specific exemption under Tax Code,
				  Chapter 171, Subchapter B, if it were a corporation, may qualify for the
				  exemption from the tax in the same manner and under the same conditions as a
				  corporation. See Tax Code, §
										171.088
				  (Exemption--Noncorporate Entity Eligible for Certain Exemptions). For
				  provisional exemptions for certain entities, see subsection (i) of this
				  section; for trade show exemptions, see subsection (j) of this section.
(1) An entity that believes it is exempt from
				  franchise tax must furnish to the comptroller sufficient evidence to establish
				  its exempt status. The entity claiming the exemption bears the burden to
				  establish its entitlement to exempt status and any doubts will result in a
				  denial of the application for exemption.
(2) Except as otherwise provided in
				  subsections (f), (i), (j), and (n) of this section, each entity must submit to
				  the comptroller:
(A) a request for exemption
				  in writing, which may require using forms developed by the comptroller for
				  requesting exemptions, indicating the particular provision of Tax Code, Chapter
				  171, under which exemption is claimed;
(B) a detailed statement of both the entity's
				  past and current activities, if any, and its future plan of activities, each in
				  relation to the manner in which the entity proposes to implement the purposes
				  clause in its certificate of formation or application for
				  registration;
(C) an entity formed
				  or created under Texas law whose articles of organization or formation is on
				  file with the Texas Secretary of State need not submit copies of those
				  documents with its request for exemption. A Texas entity that is not required
				  to file organizational documents with the Texas Secretary of State must furnish
				  a signed and dated copy of its organizational documents with its exemption
				  request. If a non-Texas entity is required to file articles of organization or
				  formation with its home jurisdiction Secretary of State, or other designated
				  agency or officer, the entity must provide file-stamped copies of those filed
				  organizational or formation documents. If a non-Texas entity is not required to
				  file its articles of organization with the Secretary of State or other
				  authority of its home jurisdiction, it must furnish a signed and dated copy of
				  its organizational or formation documents with its exemption request;
				  and
(D) any additional information
				  the comptroller may require to make a determination whether the entity is
				  eligible for a franchise tax exemption.