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Texas: Proposed amendments to franchise tax rule on cost of goods sold (COGS)

Public comment period is open until May 3, 2026.

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april 1, 2026

The Texas Comptroller of Public Accounts has proposed amendments to the administrative rule governing computation of the cost of goods sold (COGS) deduction for the Texas franchise tax. The amendments are intended to reflect the Comptroller’s determination that certain elements of the franchise tax, including the COGS deduction, can be based on the current version of the Internal Revenue Code (IRC) as opposed to that in effect on January 1, 2007.

The proposed amendments are expected to be published in the Texas State Register on April 3, 2026, and the public comment period is open until May 3, 2026.

Read an April 2026 report prepared by KPMG LLP

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