Franchise tax frequently asked questions about professional employer organizations. The Texas Comptroller’s Office recently released the 2020 Texas Franchise Tax Report Information and Instructions (Form 05-908). (Texas Tax Code 171.2125.) Texas Franchise Tax: 2020 Rates, Thresholds, & Deduction Limits. Revenue Exclusion: The 82nd state legislator amended section 171.1011 to include subsection (g-7) which defines a Qualified Courier based on eight (8) factors listed below. (C) Taxes imposed by law on the taxable entity itself are not allowed as flow-through funds and cannot be excluded from total revenue. Texas Franchise Tax PPP Forgiveness Exclusion. (2) Flow-through funds mandated by contract. (b) A corporation is entitled to an exemption under this section based on the corporation's exemption from the federal income tax if the corporation files with the comptroller evidence establishing the … (C) Taxes imposed by law on the taxable entity itself are not allowed as flow-through funds and cannot be excluded from total revenue. On April 3, 2020, the Texas Supreme Court (Supreme Court) issued two opinions related to the Texas franchise tax cost of goods sold (COGS) deduction in the context of companies claiming to furnish labor or materials to projects related to real property under Texas Tax Code (TTC) § 171.1012(i). (3) a corporation exempted from federal income tax under Section 501(c)(16), Internal Revenue Code. ... or assigned employees that a client company will need to calculate compensation and COGS on the client company's franchise tax report. The […] It contains relevant information to assist taxpayers with the proper and timely filing of Texas Franchise Reports for the 2020 report year. See Form 05-158 instructions for more information. Examples include, but are not limited to, the Texas mixed beverage tax and the Texas franchise tax. See instructions for Item 9 on Form 05-158-A for more information. Exclusions. ... Are there any exclusions from total revenue for a professional employer organization? Texas Supreme Court Issues Opinions on TX COGS Deduction & Revenue Exclusion Overview On April 3, 2020, the Texas Supreme Court (Supreme Court) issued two opinions related to thexas Te franchise tax cost of goods sldo (OGS)C deduction in the context of companies claiming to furnish la bor or materials to projects related to real Apportionment Factor. (2) Flow-through funds mandated by contract. The Texas franchise tax statutes then allow the taxpayer to reduce its total revenue by the amount of certain “revenue exclusions” listed in the statute. On May 8, 2021, Governor Abbott signed HB 1195, which excludes forgiven Paycheck Protection Program (“PPP”) loans from total revenue for Texas franchise tax purposes. 2020 Texas Franchise Rates, Thresholds & Deduction Limits 2020 Rates, Thresholds, & Deduction Limits Item Amount No Tax Due Threshold $1,180,000 Tax Rate (retail or wholesale) 0.375% Tax Rate (other than retail or wholesale) 0.75% Do I have to file a Texas franchise tax return? What is the Texas franchise tax threshold for 2020? Exclusions from Revenue: Enter exclusions from revenue for the period upon which the tax is based. Examples include, but are not limited to, the Texas mixed beverage tax and the Texas franchise tax. Overview. 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