Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter V - FRANCHISE TAX › Section 3.593 - Margin: Franchise Tax Credits

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Effective date. The provisions of this section apply to franchise tax reports
				  originally due on or after January 1, 2008, except as otherwise
				  noted.
(b) Definitions. The
				  following words and terms, when used in this section, shall have the following
				  meanings, unless the context clearly indicates otherwise.
(1) Research and development credit--A
				  research and development credit established under Tax Code, Chapter 171,
				  Subchapter O, on a franchise tax report originally due prior to January 1,
				  2008.
(2) Jobs creation credit--A
				  jobs creation credit established under Tax Code, Chapter 171, Subchapter P, on
				  a franchise tax report originally due prior to January 1, 2008.
(3) Investment credit--An investment credit
				  established under Tax Code, Chapter 171, Subchapter Q, on a franchise tax
				  report originally due prior to January 1, 2008 and an investment credit
				  established under Tax Code, Chapter 171, Subchapter Q-1.
(4) Enterprise project--A person designated
				  as an enterprise project under Government Code, Chapter 2303, on or after
				  September 1, 2001, but before January 1, 2005.
(5) Enterprise zone--An area designated as an
				  enterprise zone under Government Code, §
											2303.003.
(6) Qualified business--A person certified as
				  a qualified business under Government Code, §
											2303.402.
(7) Qualified capital investment--Tangible
				  personal property that is first placed in service in an enterprise zone by a
				  qualified business that has been designated as an enterprise project and that
				  is defined in IRS Reg. §1.48-1(c) and described in Internal Revenue Code,
				  §1245(a), subject to depreciation or amortization including engines,
				  machinery, tools, and implements that are used in a trade or business, or are
				  held for investment. The term includes transportation costs and direct labor
				  costs necessary to fabricate, install or place the tangible personal property
				  in service. The term does not include real property or buildings and their
				  structural components. Property that is leased under a capitalized lease is
				  considered a "qualified capital investment," but property that is leased under
				  an operating lease is not considered a "qualified capital investment." Property
				  that is expensed under Internal Revenue Code, §179, is not considered a
				  "qualified capital investment." The term also does not include all costs
				  included in the depreciable basis such as indirect labor costs, interest,
				  intangibles and overhead.
(8)
				  Tangible personal property first placed in service in an enterprise zone
				  includes tangible personal property that is:
(A) purchased by an enterprise project for
				  placement in an incomplete improvement that is under active construction or
				  other physical preparation;
(B)
				  identified by a purchase order, invoice, billing, sales slip, or contract;
				  and
(C) physically present at the
				  enterprise project's qualified business site, as defined by Government Code,
				  §
												2303.003, and in use
				  by the enterprise project on the original due date of the report on which the
				  credit is taken.
(9)
				  Clean energy project--A project as defined by Natural Resources Code, §
											120.001(2).