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Real Estate Leases And Margin Taxes: Who Pays?

Law360 (April 8, 2011, 11:33 AM EDT) -- In May 2006, the Texas Legislature dramatically overhauled the Texas Franchise Tax[1] by expanding the tax base to include virtually all entities whose owners receive liability protection under state law and by changing the manner in which the franchise tax was calculated.

These sweeping changes make most landlords in Texas subject to the new “margin” tax because limited partnerships, which were previously exempt, are now subject to the new tax. Although this new tax was imposed upon the landlord, most landlords have attempted and succeeded in...
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