The Comptroller Is Doing it Wrong: The Proper Calculation Formula for Cost of Goods Sold Under the Texas Franchise Tax

On August 25th, our law firm filed an amici curiae brief on behalf of six Texas franchise taxpayers in Hegar v. Autohaus, LP, LLP, a cost of goods sold case pending at the Third Court of Appeals. Concerned about the narrow arguments presented by the parties and the financial and administrative burdens imposed by the Comptroller’s calculation methods, the amici taxpayers seized the opportunity to present the court with a straightforward, statutorily-based COGS analysis that relies heavily upon Internal Revenue Code concepts (such as IRC Section 263A) and will benefit taxpayers across many industries. In response, the Comptroller notified the court that it will file a response by September 26th.

The amici brief is available for review here. For more information, please contact: Jimmy Martens, Danielle Ahlrich, or Amanda Taylor.