SALT Report 2984 – The Texas Comptroller issued guidance regarding House Bill 800, which creates a sales and use tax exemption for the purchase, lease, or rental of depreciable tangible personal property for direct use in qualified research, as defined in Internal Revenue Code Section 41.
The depreciable property must have a useful life that is greater than one year and must be subject to depreciation either under generally accepted accounting principles, or under IRC Section 167 or Section 168.
To claim the sales tax exemption the person engaged in qualified research will be required to complete an application and file an annual information report with the Comptroller. In addition, the person engaged in qualified research has the option of claiming a credit for franchise tax instead of the sales tax exemption.
The sales tax exemption is effective Jan. 1, 2014.
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