Comptroller Makes Rules Changes Suggested by TSCPA’s State Taxation Committee

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  • The proposed rule that would have placed restrictions on the definition of passive income was withdrawn.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proposed rule that did not allow rental income that flows from a partnership to a partner to be considered passive was withdrawn.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.

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One Response to Comptroller Makes Rules Changes Suggested by TSCPA’s State Taxation Committee

  1. Prior to the Margin Tax law, I considered the Texas Comptroller’s office the easist, most knowledgeable governmental entity to work with; not so any more. They, and us, are getting better acquainted with the “new” tax law but when it gets complicated, my experience has been that the field office personnel just don’t know what to do in many of these cases.
    And, to make matters worse, although the better trained representatives in Austin (in their main offices, not Austin field offices) usually know the answers to complex franchise tax questions, they say they are not allowed to meet with us in person. In urgent, complicated situations, having only the local, less knowledgeable reps available to speak to in person makes solving these situations very difficult.
    In my opinion, the State Comptroller’s office should assign at least one highly experienced agent to each field office to help solve the more complicated franchise tax problems. Otherwise, wrong answers by field agents or wrong actions by field agents or preparers can cause the problem to get worse. The consequence of these wrong moves may create the necesity for more field office visits, more hours spent by both field agents and preparers and perhaps may even cause more serious problems like loss of corporate privileges and loss of the company’s charter.

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