Tax Policy News

May 2014

The Comptroller's office publishes this online newsletter to keep you informed about Texas taxes and what is happening in the Tax Policy Division. Tax Policy News provides general information and is not a substitute for legal or other professional advice.

In This Issue...


Franchise Tax

Franchise Tax Reports Deadline

Annual franchise tax reports are due May 15. Beat the rush to file your franchise tax report or request an extension by using Webfile to electronically file reports.

Insurance Tax

Volunteer Fire Department Assistance Fund Billing

The Comptroller will mail the billings for the Volunteer Fire Department Assistance Fund Assessment by the end of May, and the assessment is due Aug. 1, 2014.

This assessment applies to property and casualty insurers writing homeowners insurance, fire insurance, farm and ranch owners insurance, private passenger auto physical damage insurance, commercial auto physical damage insurance or commercial multi-peril insurance.

Sales Tax

Cinco de Mayo Fireworks Sales

Fireworks can be legally sold during the Cinco de Mayo celebration period (May 1 through May 5), but only at a location that is not more than 100 miles from the Texas-Mexico border and in a county in which the county commissioner's court has approved the sale of fireworks during that period.

Fireworks retailers must collect the 2 percent state fireworks tax in addition to all applicable state and local sales and use taxes. The 2 percent fireworks tax applies to small fireworks such as firecrackers, rockets, roman candles and fountains that are included in the U.S. Department of Transportation's 1.4G category.

For more information, see our Fireworks Tax publication.

Energy Star Sales Tax Holiday is Memorial Day Weekend

Memorial Day is May 26 this year. The holiday coincides with the annual Energy Star Sales Tax Holiday (May 24-26) when Texas shoppers get a break from state and local sales and use taxes on purchases of certain energy-efficient products.

Sexually Oriented Business Fee

Fees are Due Immediately

The Comptroller mailed a letter in April to both active and inactive businesses set up for the Sexually Oriented Business Fee (imposed by Chapter 102 of the Business and Commerce Code) to notify them the fee is still owed and that claiming ongoing litigation as a basis for not paying the fee is not valid.

The law went into effect Jan. 1, 2008, and the first report and fee were due April 21, 2008. The fee is required to be reported and paid by the 20th day of the month following a calendar quarter. All past due reports and fees are due and payable immediately; however, reports and fees filed and paid by July 21, 2014, will be considered timely.

For report forms and more information, see the Fee on Sexually Oriented Businesses pages.

Public Outreach

Presentation by the Tax Policy Division

A member of the Tax Policy Division recently gave a presentation to the Associated Plumbing-Heating-Cooling Contractors of Texas in Buda, Texas about their sales and use tax responsibilities.

Forms - Revised

Franchise Tax

The credits available and credits claimed sections have been revised on the Texas Franchise Tax Credits Summary Schedule (Form 05-160). The new fields are for unused business loss carryforward carried forward from prior years (Line 8), research and development activities credit (Line 9) and the historic structure credit (Line 10). The historic structure credit is not effective until Jan. 1. 2015.

Hotel Occupancy Tax

The Comptroller is currently revising the Texas Hotel Occupancy Tax Exemption Certificate (Form 12-302) to clarify hotel tax exemptions between state and local taxing authorities and permanent residents.

Website Updates

Insurance Tax

The Comptroller updated the Volunteer Fire Department Assistance Fund Assessment to incorporate information about changes made to the total amount of the assessment by House Bill 7, which passed in 2013.

The Comptroller created a new Web page for Licensed Captive Insurers to provide information about this new type of taxpayer, the premium tax rates and the due date.

The Comptroller is developing Web pages that will provide more information about the maintenance taxes the Comptroller's office collects for the Texas Department of Insurance, including links to both the Insurance Code and the Labor Code.

Motor Fuels Tax

The Comptroller is currently updating the Motor Fuels Tax Refunds Web page to include information on Compressed Natural Gas and Liquefied Natural Gas.

Rules - Proposed, Adopted and Effective

Proposed Rules

Information about proposed rules is available from the Secretary of State website.

General Rules

Amendments to Rule 3.5, Waiver of Penalty and Interest, will be proposed May 3, 2014. The comment period ends 30 days after publication.