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Texas revises policy on treatment of net losses from sale of investments and capital assets in gross receipts calculation

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The Texas Comptroller of Public Accounts has revised policy governing the Texas Franchise Tax treatment of losses from the sale of investments and capital assets when calculating gross receipts for apportionment purposes. Under the revised policy, a net loss from the sale of all Texas investments and Texas capital assets is not included in Texas receipts. The change in policy is designed to provide consistency between the treatment of the numerator and denominator of the gross receipts factor following the Texas Supreme Court’s 2016 decision in Hallmark Marketing Co. v. Hegar and is effective for all open periods within the statute of limitations.