| (C) other costs. (4) A staff leasing company shall determine compensation only for the taxable entity's own employees who are not assigned employees. (g) Management company. See §3.587 of this title. (1) A taxable entity that is a management company may not include as wages and cash compensation any amounts reimbursed by a managed entity. (2) A taxable entity that is a managed entity may subtract wages and cash compensation that are reimbursed to the management company. (3) A management company shall determine compensation for only those wages and compensation payments that are not reimbursed by a managed entity. (h) Small employers. This subsection applies to a taxable entity that is a small employer and that has not provided health care benefits to any of its employees in the calendar year preceding the beginning date of its reporting period. Subject to Tax Code, §171.1014, a taxable entity to which this subsection applies that elects to subtract compensation for the purpose of computing its taxable margin under Tax Code, §171.101, may subtract the following health care benefits: (1) amounts as provided under subsection (c) of this section; (2) for the first 12-month period on which margin is based and in which the taxable entity provides health care benefits to all of its employees, an additional amount equal to 50% of the cost of health care benefits provided to its employees for that period; and (3) for the second 12-month period on which margin is based and in which the taxable entity provides health care benefits to all of its employees, an additional amount equal to 25% of the cost of health care benefits provided to its employees for that period. (4) The term "provide" does not include amounts paid by the employee, officer, director, etc. (i) Election to subtract compensation. A taxable entity must make an annual election to subtract compensation in computing margin by the due date or at the time the report is filed, whichever is later. The election to subtract compensation is made by filing the franchise tax report using the compensation method. (1) After the due date of the report, an amended report may not be filed to change the method of computing margin from the compensation deduction to the cost of goods sold deduction. (2) An amended report may be filed to change the method of computing margin from the compensation deduction to 70% of total revenue or, if qualified, the E-Z Computation. |
| Source Note: The provisions of this §3.589 adopted to be effective January 1, 2008, 32 TexReg 10038; amended to be effective January 1, 2009, 33 TexReg 10504; amended to be effective December 31, 2009, 34 TexReg 9471 |
