taxes

Franchise Tax Frequently Asked Questions

Apportionment

Do Gross Receipts Everywhere include Texas Gross Receipts?

Yes. Gross receipts everywhere are the sum of gross receipts in Texas plus gross receipts outside of Texas.

Can a taxpayer use the Multistate Tax Compact’s (MTC) three-factor apportionment formula to apportion its margin when calculating the Texas franchise tax?

No. Taxable entities must calculate the Texas franchise tax amount they owe using the Texas franchise tax single-factor apportionment formula.

See Texas Tax Code Sections 171.105 and 171.106 and Rule 3.591, Margin: Apportionment.