Texas Court Won't Split Biz Units In Franchise Tax Figures

Law360, Dallas (January 2, 2014, 8:15 PM EST) -- In its first analysis of Texas’s current franchise tax, a state appeals court on Tuesday said businesses that operate as combined groups shouldn’t be audited as stand-alone subsidiaries in determining a cost-of-goods-sold deduction and expanded how the deduction can apply to energy and construction companies.

The Third Court of Appeals of Texas rejected argument from the state comptroller that it should be able to treat subsidiaries of oil field services company Newpark Resources Inc. as distinct entities in determining whether to apply the cost-of-goods-sold deduction for...
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