Franchise Tax Loss for Out of State Companies

This week the 3rd Court of Appeals handed a win to the Comptroller by ruling that  out of state comapnies shouldn’t use the 3 factor formula of the multi state compact (which is in Texas Tax Code Chapter 141) but rather should use the fracnhise (margin) tax calculation methods of Chapter 171.

Tax nerd stuff. But, big dollars at stake, so brush up on the nerd lifestyle.  How many corporations can you think of that aren’t headquartered in Texas but do business in Texas?  Lots & Lots.

Next stop: TX Supreme Court.

Graphic Packaging Corp v. Hegar  Law360