Texas Tax Code

§ 171.1013 — DETERMINATION OF COMPENSATION

TX § 171.1013Title 2. STATE TAXATION · Part F. FRANCHISE TAX; CREDITS · Ch. 171. FRANCHISE TAX · Art. C. DETERMINATION OF TAXABLE MARGIN; ALLOCATION AND APPORTIONMENT

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(a)Except as otherwise provided by this section, "wages and cash compensation" means the amount entered in the Medicare wages and tips box of Internal Revenue Service Form W-2 or any subsequent form with a different number or designation that substantially provides the same information. The term also includes, to the extent not included above:

(1)net distributive income from a taxable entity treated as a partnership for federal income tax purposes, but only if the person receiving the distribution is a natural person;

(2)net distributive income from limited liability companies and corporations treated as S corporations for federal income tax purposes, but only if the person receiving the distribution is a natural person;

(3)stock awards and stock options deducted for federal income tax purposes; and

(4)net distributive income from a limited liability company treated as a sole proprietorship for federal income tax purposes, but only if the person receiving the distribution is a natural person.

(b)Subject to Section 171.1014, a taxable entity that elects to subtract compensation for the purpose of computing its taxable margin under Section 171.101 may subtract an amount equal to:

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Legislative history

Acts 2006, 79th Leg., 3rd C.S., Ch. 1 (H.B. 3), Sec. 5, eff. January 1, 2008. Acts 2007, 80th Leg., R.S., Ch. 1282 (H.B. 3928), Sec. 16, eff. January 1, 2008. Acts 2013, 83rd Leg., R.S., Ch. 117 (S.B. 1286), Sec. 26, eff. September 1, 2013.