Taxable Entities
Taxable Entities (Texas Margin Tax)
Included Taxable Entities Under the New Texas Franchise (Margin) Law:
Obviously, the most important question on the mind of business owners is whether the new margin tax applies to their entities. Under the former Franchise Tax, only Corporations and Limited Liability Companies were taxable entities. That is no longer the case and the State Legislature has (with some exceptions) made the following entities Taxable Entities subject to the new Margin Tax:
- Limited Liability Companies
- Disregarded Entities
- Limited Liability Partnerships
- Banking Corporations
- Savings and Loan Associations
- Partnerships (with exceptions)
- Professional Associations
- Joint Stock Companies
- Joint Ventures A Joint Venture does not include joint operating or co-ownership arrangements meeting the requirements of Treasury Regulation Section 1.761-2(a)(3) that elect out of federal partnership treatment as provided by Section 761(a), Internal Revenue Code
- Business Trusts
- Non-Texas Entities with an interest in an oil and gas well
- Any entity that can file under sole proprietorship if the entity is formed in a manner under the statutes of this state, another state, or a foreign country that limit the liability of the entity