Can you pay this tax and stay in business?
Have you heard of the new Margin Tax that went into affect in Texas on January 1, 2007?
Corporations and other organizations that may never have owed the old State Franchise tax may owe a substantial amount of money under the new tax laws.
The most worrisome part of the new tax is that the calculations are not applied to your net income as they always have been before. The new calculation is on the gross income. Not all of your expenses can be deducted from your income.
We all understand that while a small business may have gross income of a $1,000,000.00 or more, expenses can be so high that by the end of the year they have lost money.
No Federal income tax. No Texas Franchise tax, Right? Wrong.
It is very important that all businesses take a look at the new Franchise guidelines. Keep in mind that something as simple as collecting rental income could cause your organization to be taxable under the new rules. Only certain businesses can deduct Contractors and no business can deduct payroll paid to illegal aliens.
Be prepared. Look at your business and the new Texas Franchise tax before before you incur an unexpected tax liability.
For more information about your business and Texas Margin tax please contact us at 972-530-1040 or the Texas State Comptroller at 1-800-252-1381.