For Texas taxpayers looking to reduce franchise tax liability or receive a sales tax exemption.Contact Us
The Franchise Tax Credit is based on Qualified Research Expenses. This credit can be claimed by any person who performs qualified research activities, but it cannot be greater than 50% of the franchise tax due for that period.
Qualified Research Activities can include the below. These activities must take place within Texas.
Find out if you qualify for the Texas research credit.Contact Us
Properly claiming the R&D tax credit can be difficult without the right expertise - That’s where GOAT.tax comes in. Our R&D tax credit software identifies any qualified research expenses your company paid and qualified research activities to ensure you receive the largest refund possible.
For the Franchise Tax Credit, taxpayers might need to show documentation in the form of gross receipts, employee compensation, contracted services, materials costs, and vendor invoices.
For the Sales Exemption, taxpayers will need to provide a description of items when they complete the Qualified Research Sales and Use Tax Exemption Certificate.
All taxpayers in Texas that perform these qualified research activities must satisfy the following criteria of the IRS Four-Part Test as outlined in IRC §41(d):
The Texas research credit has a carryforward of 20 years.
There are two separate processes for claiming the Texas research credit, which are dependent on whether you file the Franchise Tax Credit or the Sales Tax Exemption.
Franchise Tax Credit: File a Long Form Franchise Tax Report (05-158-A and 05-158-B), Credits Summary Schedule (05-160), and Research and Development Activities Credits Schedule (05-178).
Sales Tax Exemption: Complete Texas Qualified Research Sales and Use Tax Exemption Certificate Form 01-931. The registration number must be included on the exemption certificate. Additionally, anyone claiming the Sales Tax Exemption must also file an Annual Information Report (AIR). This form must be submitted by March 31st during the same year the exemption is being claimed.