Frequently Asked Questions
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Note: TTC means Texas Tax Code and IRC means Internal Revenue Code
- 1. Can a combined group use the 100% tax due option in requesting an extension?
- In order to use the 100% tax due option, all members of the combined group must have been previously subject to the franchise tax. If any of the members were not subject to the franchise tax previously, the combined group must use the 90% of the tax due option for the 2009 report.
For 2009 franchise tax reports and beyond, a combined group may only use the 100% option if the combined group has lost a member or if the members of the combined group are the same as they were on the last day of the period upon which the report due in the previous calendar year was based.
- 2. When must the election for COGS or Compensation be made and once made, can it be changed?
- The election for COGS or Compensation is made by filing the franchise tax report using one method or the other. The report may be amended to change election from COGS to compensation or compensation to COGS, if qualified. An amended report that results in a reduction of tax liability is a request for refund and must meet refund requirements. (Updated 05/31/13)
- 3. If a taxable entity was a member of a combined group for the previous franchise tax report, can the entity use the 100% tax due option in requesting an extension?
- No, a separate entity that was included in a combined group report originally due in the previous calendar year may not use the 100% extension option.
- 4. What are the extension requirements for the first annual report?
- Annual extension requirements will apply for all annual reports, including the first annual report. On the first annual report, the option to pay 100% of the prior year's tax is not available. (Updated 07/21/10)