The Texas Comptroller of Public Accounts (the Comptroller) published proposed amendments to Texas’ franchise tax apportionment rule in the January 20 issue of the Texas Register, discarding the now-repudiated “receipt-producing, end-product act” test. The Comptroller proposed these amendments in response to the Texas Supreme Court’s unanimous decision in Sirius XM Radio, Inc. v. Hegar. Eversheds
Texas
Highlights from the Texas Comptroller’s Annual Briefing
The Texas Comptroller of Public Accounts held its annual briefing in Austin on September 29 and provided taxpayers with updates regarding audits, staffing, pending legislation and related topics. The meeting – which was the first in-person briefing since the beginning of the pandemic – highlighted several taxpayer-friendly audit changes and efficiencies being driven by the…
Texas Comptroller rules online learning courses are nontaxable while teacher planning services are taxable data processing
The Texas Comptroller published a private letter ruling concluding that subscriptions to online learning courses for academic subjects, professional topics, and vocational topics are not taxable. However, a company’s subscriptions for the “teacher plan,” which provides teachers lesson plans and other capabilities to integrate into their classrooms, are taxable as data processing. None of the…
Texas Comptroller rules cloud-based online platform educational services not subject to sales tax
The Texas Comptroller recently published a private letter ruling (issued on June 10, 2022) concluding that access to a cloud-based online platform used by healthcare students while attending courses at accredited universities and colleges was not subject to sales tax. The platform was accessed exclusively via the Internet, and the students did not download any…
Texas provides guidance on taxability of card management programs
The Texas Comptroller recently released a private letter ruling (provided to the taxpayer on April 29, 2022) concluding that the taxpayer’s payment card management services are nontaxable in Texas. In the ruling, the taxpayer provides a payment card management program that allows services, such as food delivery services, the ability to apply customized spending limits…
The Texas R&D Credit: Comptroller’s regs could hogtie taxpayers
“Business-friendly” Texas has been the leading poacher of California-based companies for over a decade, with relocations from tech-dominated California only accelerating during the pandemic. Oddly enough, at a time when Texas’s highest-profile new neighbors are known for cutting-edge research, the state seeks to narrow the scope of its research and development credit applicable to some…
Loan packages taxable data processing in Texas
The Texas Court of Appeals ruled that a law firm’s purchases of loan packages for lending institution clients was the taxable purchase of data processing services. The law firm purchased loan packages consisting of promissory notes, deeds of trust, tax disclosures and other pertinent legal documents from vendors. The law firm argued that the “essence…
Texas Comptroller determines medical record retrieval is taxable data processing
In a private letter ruling, the Texas Comptroller concluded that a medical record retrieval company was providing a taxable data processing service only to the extent it charged for copying of the records it retrieved. The Texas-based medical records retrieval company’s customers are attorneys and insurance companies. The company’s employees manually retrieve and review…
At California State Court, streaming video providers notch another video service provider fee win
On September 20th, the Los Angeles County Superior Court held that local video service provider fees do not apply to streaming video providers. This decision is consistent with a prior decision by the United States District Court for the District of Nevada, which held that streaming video providers were not subject to Nevada localities’ franchise…
Hawaii and Texas join growing list of states adopting federal rule restricting expert discovery
In an article for Bloomberg Tax, Eversheds Sutherland attorneys Dan Schlueter and Fahad Mithavayani highlight how Hawaii and Texas are the latest states to join the trend to restrict the discoverability of attorney communications with expert witnesses and what it means for state tax litigation.