Tex. Tax Code Section 171.1014
Combined Reporting; Affiliated Group Engaged in Unitary Business


(a)

Taxable entities that are part of an affiliated group engaged in a unitary business shall file a combined group report in lieu of individual reports based on the combined group’s business. The combined group may not include a taxable entity that conducts business outside the United States if 80 percent or more of the taxable entity’s property and payroll, as determined by factoring under Chapter 141 (Multistate Tax Compact), are assigned to locations outside the United States. In applying Chapter 141 (Multistate Tax Compact), if either the property factor or the payroll factor is zero, the denominator is one. The combined group may not include a taxable entity that conducts business outside the United States and has no property or payroll if 80 percent or more of the taxable entity’s gross receipts, as determined under Sections 171.103 (Determination of Gross Receipts from Business Done in This State for Margin), 171.105 (Determination of Gross Receipts from Entire Business for Margin), and 171.1055 (Exclusion of Certain Receipts for Margin Apportionment), are assigned to locations outside the United States.

(b)

The combined group is a single taxable entity for purposes of the application of the tax imposed under this chapter, including Section 171.002 (Rates; Computation of Tax)(d).

(c)

For purposes of Section 171.101 (Determination of Taxable Margin), a combined group shall determine its total revenue by:

(1)

determining the total revenue of each of its members as provided by Section 171.1011 (Determination of Total Revenue from Entire Business) as if the member were an individual taxable entity;

(2)

adding the total revenues of the members determined under Subdivision (1) together; and

(3)

subtracting, to the extent included under Section 171.1011 (Determination of Total Revenue from Entire Business)(c)(1)(A), (c)(2)(A), or (c)(3), items of total revenue received from a member of the combined group.

(d)

For purposes of Section 171.101 (Determination of Taxable Margin), a combined group shall make an election to subtract either cost of goods sold or compensation that applies to all of its members, or $1 million. Regardless of the election, the taxable margin of the combined group may not exceed the amount provided by Section 171.101 (Determination of Taxable Margin)(a)(1)(A) for the combined group.

(d-1)

A member of a combined group may claim as cost of goods sold those costs that qualify under Section 171.1012 (Determination of Cost of Goods Sold) if the goods for which the costs are incurred are owned by another member of the combined group.

(e)

For purposes of Section 171.101 (Determination of Taxable Margin), a combined group that elects to subtract costs of goods sold shall determine that amount by:

(1)

determining the cost of goods sold for each of its members as provided by Section 171.1012 (Determination of Cost of Goods Sold) as if the member were an individual taxable entity;

(2)

adding the amounts of cost of goods sold determined under Subdivision (1) together; and

(3)

subtracting from the amount determined under Subdivision (2) any cost of goods sold amounts paid from one member of the combined group to another member of the combined group, but only to the extent the corresponding item of total revenue was subtracted under Subsection (c)(3).

(f)

For purposes of Section 171.101 (Determination of Taxable Margin), a combined group that elects to subtract compensation shall determine that amount by:

(1)

determining the compensation for each of its members as provided by Section 171.1013 (Determination of Compensation) as if each member were an individual taxable entity, subject to the limitation prescribed by Section 171.1013 (Determination of Compensation)(c);

(2)

adding the amounts of compensation determined under Subdivision (1) together; and

(3)

subtracting from the amount determined under Subdivision (2) any compensation amounts paid from one member of the combined group to another member of the combined group, but only to the extent the corresponding item of total revenue was subtracted under Subsection (c)(3).

(g)

Repealed by Acts 2007, 80th Leg., R.S., Ch. 1282, Sec. 37(3), eff. January 1, 2008.

(h)

Each taxable entity that is part of a combined group report shall, for purposes of determining margin and apportionment, include its activities for the same period used by the combined group.

(i)

Each member of the combined group shall be jointly and severally liable for the tax of the combined group.

(j)

Notwithstanding any other provision of this section, a taxable entity that provides retail or wholesale electric utilities may not be included as a member of a combined group that includes one or more taxable entities that do not provide retail or wholesale electric utilities if that combined group in the absence of this subsection:

(1)

would not meet the requirements of Section 171.002 (Rates; Computation of Tax)(c) solely because one or more members of the combined group provide retail or wholesale electric utilities; and

(2)

would have less than five percent of the combined group’s total revenue derived from providing retail or wholesale electric utilities.
Amended by:
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. 17, eff. January 1, 2008.
Acts 2007, 80th Leg., R.S., Ch. 1282 (H.B. 3928), Sec. 37(3), eff. January 1, 2008.
Acts 2013, 83rd Leg., R.S., Ch. 1232 (H.B. 500), Sec. 11, eff. January 1, 2014.

Source: Section 171.1014 — Combined Reporting; Affiliated Group Engaged in Unitary Business, https://statutes.­capitol.­texas.­gov/Docs/TX/htm/TX.­171.­htm#171.­1014 (accessed Apr. 13, 2024).

171.0001
General Definitions
171.001
Tax Imposed
171.0002
Definition of Taxable Entity
171.002
Rates
171.0003
Definition of Passive Entity
171.003
Increase in Rate Requires Voter Approval
171.0004
Definition of Conducting Active Trade or Business
171.0005
Definition of New Veteran-owned Business
171.006
Adjustment of Eligibility for No Tax Due, Discounts, and Compensation Deduction
171.0011
Additional Tax
171.051
Application for Exemption
171.052
Certain Corporations
171.053
Exemption--railway Terminal Corporation
171.055
Exemption--open-end Investment Company
171.056
Exemption--corporation with Business Interest in Solar Energy Devices
171.057
Exemption--nonprofit Corporation Organized to Promote County, City, or Another Area
171.058
Exemption--nonprofit Corporation Organized for Religious Purposes
171.059
Exemption--nonprofit Corporation Organized to Provide Burial Places
171.060
Exemption--nonprofit Corporation Organized for Agricultural Purposes
171.061
Exemption--nonprofit Corporation Organized for Educational Purposes
171.062
Exemption--nonprofit Corporation Organized for Public Charity
171.063
Exemption-nonprofit Corporation Exempt from Federal Income Tax
171.064
Exemption--nonprofit Corporation Organized for Conservation Purposes
171.065
Exemption--nonprofit Corporation Organized to Provide Water Supply or Sewer Services
171.066
Exemption--nonprofit Corporation Involved with City Natural Gas Facility
171.067
Exemption--nonprofit Corporation Organized to Provide Convalescent Homes for Elderly
171.068
Exemption--nonprofit Corporation Organized to Provide Cooperative Housing
171.069
Exemption--marketing Associations
171.070
Exemption--lodges
171.071
Exemption--farmers’ Cooperative Society
171.072
Exemption--housing Finance Corporation
171.073
Exemption--hospital Laundry Cooperative Association
171.074
Exemption--development Corporation
171.075
Exemption--cooperative Association
171.076
Exemption--cooperative Credit Association
171.077
Exemption--credit Union
171.079
Exemption--electric Cooperative Corporation
171.080
Exemption--telephone Cooperative Corporations
171.081
Exemption--corporation Exempt by Another Law
171.082
Exemption--certain Homeowners’ Associations
171.083
Exemption--emergency Medical Service Corporation
171.084
Exemption--certain Trade Show Participants
171.085
Exemption
171.086
Exemption: Political Subdivision Corporation
171.087
Exemption--nonprofit Corporation Organized for Student Loan Funds or Student Scholarship Purposes
171.088
Exemption--noncorporate Entity Eligible for Certain Exemptions
171.101
Determination of Taxable Margin
171.103
Determination of Gross Receipts from Business Done in This State for Margin
171.105
Determination of Gross Receipts from Entire Business for Margin
171.106
Apportionment of Margin to This State
171.107
Deduction of Cost of Solar Energy Device from Margin Apportioned to This State
171.108
Deduction of Cost of Clean Coal Project from Margin Apportioned to This State
171.109
Deduction of Relocation Costs by Certain Taxable Entities from Margin Apportioned to This State
171.111
Temporary Credit on Taxable Margin
171.151
Privilege Period Covered by Tax
171.152
Date on Which Payment Is Due
171.154
Payment to Comptroller
171.158
Payment by Foreign Taxable Entity Before Withdrawal from State
171.201
Initial Report
171.202
Annual Report
171.203
Public Information Report
171.204
Information Report
171.205
Additional Information Required by Comptroller
171.206
Confidential Information
171.207
Information Not Confidential
171.208
Prohibition of Disclosure of Information
171.209
Right of Owner to Examine or Receive Reports
171.210
Permitted Use of Confidential Information
171.211
Examination of Records
171.212
Report of Changes to Federal Income Tax Return
171.251
Forfeiture of Corporate Privileges
171.252
Effects of Forfeiture
171.253
Suit on Cause of Action Arising Before Forfeiture
171.254
Exception to Forfeiture
171.255
Liability of Director and Officers
171.256
Notice of Forfeiture
171.257
Judicial Proceeding Not Required for Forfeiture
171.258
Revival of Corporate Privileges
171.259
Banking Corporations and Savings and Loan Associations
171.260
Savings and Loan Association
171.301
Grounds for Forfeiture of Charter or Certificate of Authority
171.302
Certification by Comptroller
171.303
Suit for Judicial Forfeiture
171.304
Record of Judicial Forfeiture
171.305
Revival of Charter or Certificate of Authority After Judicial Forfeiture
171.306
Suit to Set Aside Judicial Forfeiture
171.307
Record of Suit to Set Aside Judicial Forfeiture
171.308
Corporate Privileges After Judicial Forfeiture Is Set Aside
171.309
Forfeiture by Secretary of State
171.310
Judicial Proceeding Not Required for Forfeiture by Secretary of State
171.311
Record of Forfeiture by Secretary of State
171.312
Revival of Charter or Certificate of Authority After Forfeiture by Secretary of State
171.313
Proceeding to Set Aside Forfeiture by Secretary of State
171.314
Corporate Privileges After Forfeiture by Secretary of State Is Set Aside
171.315
Use of Corporate Name After Revival of Charter or Certificate of Authority
171.316
Banking Corporations
171.317
Savings and Loan Associations
171.351
Venue of Suit to Enforce Chapter
171.352
Authority to Restrain or Enjoin
171.353
Appointment of Receiver
171.354
Agent for Service of Process
171.355
Service of Process on Secretary of State
171.361
Penalty for Disclosure of Information on Report
171.362
Penalty for Failure to Pay Tax or File Report
171.363
Wilful and Fraudulent Acts
171.401
Revenue Deposited in General Revenue Fund
171.501
Refund for Job Creation in Enterprise Zone
171.0525
Exemption--certain Insurance Companies
171.551
Definitions
171.552
Entitlement to Credit
171.553
Application for and Issuance of Allocation Certificate
171.554
Amount of Credits
171.555
Apportionment of Credit
171.556
Length of Credit
171.557
Carry Forward or Backward
171.558
Recapture
171.559
Allocation of Credit
171.560
Filing Requirements After Allocation
171.561
Application for Credit
171.562
Rules
171.563
Compliance Monitoring
171.564
Inclusion of Information in Low Income Housing Plan
171.565
Expiration of Authority to Allocate Credits
171.566
Priority Allocation for Certain Qualified Developments
171.601
Definition
171.602
Tax Credit for Clean Energy Project
171.651
Definitions
171.652
Eligibility for Credit
171.653
Ineligibility for Credit for Certain Periods
171.654
Amount of Credit
171.655
Attribution of Expenses Following Transfer of Controlling Interest
171.656
Combined Reporting
171.657
Burden of Establishing Credit
171.658
Limitations
171.659
Carryforward
171.660
Assignment Prohibited
171.661
Application for Credit
171.662
Rules
171.663
Reporting of Estimates and Collection of Information
171.664
Deposit of Certain Revenue
171.665
Expiration
171.1011
Determination of Total Revenue from Entire Business
171.1012
Determination of Cost of Goods Sold
171.1013
Determination of Compensation
171.1014
Combined Reporting
171.1015
Reporting for Certain Partnerships in Tiered Partnership Arrangement
171.1016
E-z Computation and Rate
171.1055
Exclusion of Certain Receipts for Margin Apportionment
171.1121
Gross Receipts for Margin
171.1532
Business on Which Tax on Net Taxable Margin Is Based
171.2022
Exemption from Reporting Requirements
171.2125
Calculating Cost of Goods or Compensation in Professional Employer Services Arrangements
171.2515
Forfeiture of Right of Taxable Entity to Transact Business in This State
171.3015
Forfeiture of Certificate or Registration of Taxable Entity
171.3125
Revival of Certificate or Registration of Taxable Entity After Forfeiture by Secretary of State
171.4011
Allocation of Certain Revenue to Property Tax Relief Fund
171.10132
Provisions Related to Certain Grants Received for Broadband Deployment in Texas

Accessed:
Apr. 13, 2024

§ 171.1014’s source at texas​.gov