Texas Taxes. Published and Distributed by The CPE Store, Inc.

Transcription

1 Texas Taxes Published and Distributed by The CPE Store, Inc.

2 Table of Contents Chapter 1 - An Overview of Texas Taxes... 1 Learning Objectives... 1 Introduction... 1 Tax Rates... 1 Discounts for Taxes and Fees... 4 Interest on Credits, Refunds, and Tax Due... 6 Review Questions... 9 Review Answers Chapter 2 - Franchise Tax: Taxable and Nontaxable Entities Learning Objectives Introduction Key Terms Taxable Entities Nontaxable Entities Nexus Additional Tax Imposed for Entities No Longer Having Nexus Taxable and Nontaxable Entities Q&A Review Questions Review Answers Chapter 3 - Franchise Tax: Passive Entities Learning Objectives Introduction Key Terms Qualification as a Passive Entity Conducting an Active Trade or Business Activities That Do Not Constitute an Active Trade or Business Reporting Requirement for a Passive Entity Passive Entities Q&A Review Questions Review Answers Chapter 4 - Franchise Tax: Exemptions Learning Objectives Introduction Application for Exemption Actions by Comptroller Qualification for Exemption Revocation, Withdrawal, or Loss of Exemptions Federal Exemption Solar Energy Device Exemption for Recycling Operation Provisional Exemptions... 31

3 Trade Show Exemption Agricultural Exemption Bingo Unit Exemption Exemptions Q&A Review Questions Review Answers Chapter 5 - Franchise Tax: Total Revenue Learning Objectives Introduction Key Terms General Rules for Reporting Total Revenue Reporting Total Revenue Exclusions from Total Revenue Uncompensated Cost for Health Care Providers and Institutions Total Revenue Q&A Review Questions Review Answers Chapter 6 - Franchise Tax: Compensation Learning Objectives Introduction Key Terms Compensation Compensation Excluded Items Benefits Staff Leasing Companies Management Company Small Employers Election to Subtract Compensation Compensation Q&A Review Questions Review Answers Chapter 7 - Franchise Tax: Cost of Goods Sold Learning Objectives Introduction Key Terms Affiliated Entities Capitalization or Expensing of Certain Costs Election to Subtract Cost of Goods Sold Exclusions from Total Revenue Film and Broadcasting Lending Institutions Mixed Transactions Owner of Goods Rentals and Leases ii

4 Reporting Methods Restaurants and Bars Cost of Goods Sold Additional Costs Indirect or Administrative Overhead Costs Costs Not Included Cost of Goods Sold Q&A Review Questions Review Answers Chapter 8 - Franchise Tax: Apportionment Learning Objectives Introduction Key Terms Apportionment Formula General Rules for Reporting Gross Receipts Treatment of Specific Items in the Computation of Gross Receipts Natural Gas Production Apportionment Q&A Review Questions Review Answers Chapter 9 - Franchise Tax: Tax Credits Learning Objectives Introduction Information Required Limitations Research and Development Credit Jobs Creation Credit Investment Credit Enterprise Projects Clean Energy Project Credit Tax Credits Q&A Review Questions Review Answers Chapter 10 - Franchise Tax: Temporary Credit for Business Loss Carryforwards Learning Objectives Introduction Key Terms Eligibility Notice Requirements Electing the Credit Computation of the Credit Credit Carryover Temporary Credit for Business Loss Carryovers Q&A Review Questions iii

5 Review Answers Chapter 11 - Franchise Tax: Reports and Payments Learning Objectives Introduction Nontaxable Entities Reports and Due Dates Annual Report Extensions Calculation of Tax Penalty and Interest on Delinquent Taxes Amended Reports Comptroller Audit Payment of Determination Information Report Reports and Payments Q&A Review Questions Review Answers Chapter 12 - Franchise Tax: Combined Reporting Learning Objectives Introduction Key Terms Mandatory Combined Reporting Determination of Combined Taxable Margin and Apportionment Reporting Entity Accounting Period of the Combined Group Liability for the Combined Tax, Penalty, and Interest Credits Standard Industrial Classification Code Tax Rate, Discounts, and E-Z Computation Combined Report Filing Combined Reporting Q&A Review Questions Review Answers Chapter 13 - Franchise Tax: Filing Requirements Learning Objectives Introduction Filing Requirements Required Information Report Franchise Tax Report Options Submitting Reports Electronic Submission of Reports Filing Extensions Electronic Reporting Q&A Review Questions Review Answers iv

6 Chapter 14 - State Sales and Use Tax: Seller's and Purchaser's Responsibilities Learning Objectives Introduction Key Terms Who Must Have a Permit Obtaining a Permit Collecting Tax Due Return Requirements and Remitting Tax Due Due Dates Reporting Periods Discounts, Prepayments, Penalties and Interest Relating to Return Filings Reports of Sales to Retailers by Wholesalers and Distributors of Beer, Wine and Malt Liquor Records Required for Comptroller Inspection Resale and Exemption Certificates Suspension of Permit Refusal to Issue Permit Cancellation of Permits with No Reported Business Activity Liability Related to Acquisition of a Business or Assets of a Business Criminal Penalties Seller s and Purchaser s Responsibilities Q&A Review Questions Review Answers Chapter 15 - State Sales and Use Tax: Miscellaneous Learning Objectives Introduction Agriculture, Animal Life, Feed, Seed, Plants, and Fertilizer Alcoholic Beverage Exemptions Contractors Drugs, Medicines, Medical Equipment, and Devices Food, Food Products, Meals, and Food Service Imports and Exports Information Services Manufacturing, Custom Manufacturing, Fabricating, and Processing Nonresidential Real Property Repair, Remodeling, and Restoration, and Real Property Maintenance Oil, Gas, and Related Well Service Repair, Remodeling, Maintenance, Restoration of Tangible Personal Property Sales Tax Holiday Clothing, Shoes, and School Supplies Sales Tax Holiday Certain Energy Star Products Review Questions Review Answers Chapter 16 - State Sales and Use Tax: Use Tax Learning Objectives Introduction Key Terms Imposition of the Use Tax v

7 Inapplicability of Use Tax User Liability, Payment of the Tax and Credit for Tax Paid to Another State Presumption Storage of Property Purchased Out of State or Under a Direct Payment Permit Local Use Tax Use Tax Q&A Review Questions Review Answers Chapter 17 - State Sales and Use Tax: Resale Certificate and Sales for Resale Learning Objectives Introduction Key Words Acceptance of Resale Certificate Blanket Resale Certificate Retailers Outside Texas Improper Use of Items Purchased for Resale Improper Use of a Resale Certificate Content of a Resale Certificate Form of a Resale Certificate Resale Certificates Q&A Review Questions Review Answers Chapter 18 - State Sales and Use Tax: Exempt Organizations Learning Objectives Introduction Exempt Organizations Entities That Must Prove Exempt Status Entities That Are Always Exempt Qualification Requirements How to Obtain Exempt Status Revocations, Withdrawals, or Loss of Exemptions Purchases by an Exempt Organization; Refund Claims and Credits Sales by an Exempt Organization Organizations That Do Not Qualify for Exempt Status Diplomatic Tax Exemptions The Alabama-Coushatta, Kickapoo, and Tigua Native American Tribes Bordering States and Governmental Units of States That Border Texas Exemption Certificate Exempt Organizations and Exempt Certificates Q&A Review Questions Review Answers Chapter 19 - State Sales and Use Tax: Multistate Tax Credits and Allowance of Credit for Tax Paid to Suppliers Learning Objectives vi

8 Introduction Key Terms Multistate Tax Credits Credit for Tax Paid to Suppliers by Sellers, Taxable Service Providers, and Persons Other Than Contractors Credit for Tax Paid to Suppliers by Certain Contractors and Repairmen Responsibilities of Persons Repairing Motor Vehicles and Private Aircraft Effect of Ruling on Taxpayer's Rights to Other Deductions Review Questions Review Answers Chapter 20 - State Sales and Use Tax: Accounting Methods, Credit Sales, Bad Debt Deductions, Repossessions, Interests on Sales Tax, and Trade-Ins Learning Objectives Introduction Accounting Methods Credit Sales Transfer or Sale of Sales Contracts and Accounts Receivable Bad Debts Repossessions Interest on Sales Tax Trade-Ins Interest on Tax Amounts Mistakenly Paid Review Questions Review Answers Chapter 21 - State Sales and Use Tax: Records Required and Auditing Taxpayer Records Learning Objectives Introduction Key Terms Persons Who Must Keep Records Records Required Failure to Keep Accurate Records Information Required Retention Examine, Copy, and Photograph Records Records Required and Information Required Q&A Auditing Taxpayer Records Review Questions Review Answers Chapter 22 - State Sales and Use Tax: Filing Requirements Learning Objectives Introduction Filing Requirements Sales and Use Tax Return Long Form Sales and Use Tax Return Short Form vii

9 Electronic Data Interchange (EDI) TeleFile Use Tax Return Review Questions Review Answers Chapter 23 - State Sales and Use Tax: Direct Payment Procedures and Qualifications Learning Objectives Introduction Direct Payment Exemption Certificate Qualifications for Direct Payment Exemption Certificate Other Requirements for Direct Payment Exemption Certificates Review Questions Review Answers Chapter 24 - State Sales and Use Tax: Refunds and Payments Under Protest Learning Objectives Introduction Requirements for Refund Claims Statute of Limitations for Refund Claims Interest on Refunds Determining When a Refund Is Claimed Denial of Refund Claim Payments Under Protest Review Questions Review Answers Chapter 25 - State Sales and Use Tax: Statute of Limitations and Criminal Offenses and Penalties Learning Objectives Introduction Statute of Limitations Criminal Offenses and Penalties Review Questions Review Answers Chapter 26 - Local Sales and Use Tax Learning Objectives Introduction Types of Local Taxing Entities Jurisdictional Boundaries and Combined Areas Which Tax to Collect Sales Tax or Use Tax? Local Sales Tax Local Use Tax Collecting Use Tax for Drop Shipments Internet Sales Exceptions Review Questions viii

10 Review Answers Chapter 27 - Property Tax: Overview Learning Objectives Introduction Texas Property Tax System Texas Local Property Taxes Fund s Purpose State s Role Property Tax Process Texas Constitution Property Taxpayers Bill of Rights Review Questions Review Answers Chapter 28 - Property Tax: Taxable and Exempt Property Learning Objectives Introduction Taxable Property Property Tax Exemptions Savings on Home Taxes Types of Home Exemptions Disabled Veteran or Survivor New Homeowners File an Exemption on Your Home Review Questions Review Answers Chapter 29 - Property Tax: Valuing Property Learning Objectives Introduction Valuing Property How Property Is Valued If Property Value Rises Rendition Review Questions Review Answers Chapter 30 - Property Tax: Setting Tax Rates Learning Objectives Introduction Setting Tax Rates How Tax Rates Work Planned Tax Increase Limit a Tax Increase Review Questions Review Answers ix

11 Chapter 31 - Property Tax: Business Personal Property Rendition of Taxable Property Learning Objectives Introduction Key Terms Business Personal Property Rendition of Taxable Property Filing and Deadlines Inspection of Property Request for Statement Regarding Value Penalties Review Questions Review Answers Chapter 32 - Property Tax: General Personal Property Rendition of Taxable Property Non-Income Producing Learning Objectives Introduction General Personal Property Rendition of Taxable Non-Income Producing Property Filing and Deadlines Inspection of Property Request for Statement Regarding Value Penalties Review Questions Review Answers Chapter 33 - Property Tax: Paying Your Taxes Learning Objectives Introduction Paying Your Taxes How to Calculate Your Taxes Deadline for Paying Unpaid Taxes Penalty and Interest Charges Review Questions Review Answers Chapter 34 - Property Tax: Taxpayer Remedies Learning Objectives Introduction Property Tax Remedies Deciding Whether to Protest How to Protest Property Value Values That Can be Protested How to Resolve Concerns Informally ARB Filing Protests Steps to Take to Prepare for Protest Hearing Dissatisfaction with the ARB's Decision x

12 Comptroller's Role in the Protest Process Review Questions Review Answers Chapter 35 - Miscellaneous Taxes and Fees Learning Objectives Introduction Emergency Service Fee Equalization Surcharge Prepaid Wireless Emergency Service Fee Wireless Emergency Service Fee Automobile Burglary and Theft Prevention Authority (ABTPA) Assessment Automobile Oil Sales Fee Battery Sales Fee Boat and Boat Motor Sales and Use Tax Cement Production Cigarette Tax Cigar and Tobacco Products Tax Cigarette and Tobacco Products Outdoor Advertising Fee Coastal Protection Fee Coin-Operated Machines Tax Controlled Substances Crude Oil Production Tax Diesel Fuel Fireworks Tax Gasoline Tax Hotel Occupancy Tax Inheritance Tax Insurance Maintenance Tax for the Texas Department of Insurance Workers Compensation Research Insurance Maintenance Taxes for the Texas Department of Insurance Insurance Maintenance Taxes for the Texas Department of Insurance, Division of Workers Compensation/Office of Injured Employees Counsel (DWC/OIEC) Insurance Premium Tax (Independently Procured) Insurance Premium Tax (Licensed Insurers) Insurance Premium Tax (Surplus Lines/Purchasing Groups) Insurance Premium Tax (Unauthorized Insurance) International Fuel Tax Agreement (IFTA) Liquefied Gas Loan Administration Fee Manufactured Housing Sales and Use Tax Miscellaneous Gross Receipts Tax Mixed Beverage Tax Motor Fuel Transporters Motor Vehicle Gross Rental Receipts Motor Vehicle Local Sports and Community Venue Motor Vehicle Sales and Use Tax Motor Vehicle Seller-Financed Sales Tax Motor Vehicle Registration Surcharge xi

13 Motor Vehicle Texas Emissions Reduction Plan (TERP) Surcharge Natural Gas Production Tax Office of Public Insurance Counsel (OPIC) Assessment Oil and Gas Well Servicing Tax Oyster Sales Fee Pari-Mutuel Tax Petroleum Products Delivery Fee Public Utility Gross Receipts Assessment Retail Charge Account Delinquency Fee Retaliatory Tax School Fund Benefit Fee Sexually Oriented Business Fee Sulphur Production Tax Texas Emissions Reduction Plan (TERP) Off Road Heavy Duty Diesel Equipment Surcharge Texas Volunteer Fire Department Assistance Fund Assessment Review Questions Review Answers Glossary Index xii