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Tag: COGS vs compensation
Texas Gross Receipts Tax Myths (Hint: It’s the Franchise Tax)
Many founders and out-of-state business owners believe Texas has a gross-receipts tax. While technically false, this myth exists because the Texas Franchise Tax – also known as the margin tax – functions similarly by taxing total revenue with limited deductions. Let’s debunk this and explain what Texas actually taxes in 2025. Is There a Gross-Receipts […]
Cost of Goods Sold for Software
Texas allows businesses to reduce their Franchise Tax by deducting Cost of Goods Sold (COGS) , but what counts as COGS for software developers, SaaS firms, and digital product sellers? The answer lies in Texas Administrative Code Rule 3.588, which offers specific guidance for tech-based companies. Here’s how to apply it in 2025. What Is […]