When State Comptroller Susan Combs issued new franchise tax rules in the Dec. 25 issue of the Texas Register, she modified some of the proposed rules as suggested by TSCPA’s State Taxation Committee. The new rules as issued were modified from the proposed rules as suggested by the committee as follows:
- The proposed rule that would have placed restrictions on the definition of passive income was withdrawn. This rule would have prevented statutorily defined passive income from qualifying unless it was from an investment.
- The proposed rule that did not allow rental income that flows from a partnership to a partner to be considered passive was withdrawn.
The State Bar of Texas Section of Taxation State Taxation Committee and other entities also issued letters supporting these issues.
The Comptroller did not concur with other recommendations by TSCPA’s State Taxation Committee.