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Introduction Think Texas doesn’t audit tech startups? Think again. The Texas Comptroller is doubling down on Franchise Tax audits, especially for SaaS companies claiming aggressive cost of goods sold (COGS) or compensation deductions under the Margin Tax. If your business is software-based and relies on recurring revenue, here’s what to know about top adjustments made […]
Introduction Texas SaaS companies hoping to reduce Franchise Tax via Cost of Goods Sold (COGS) deductions need to be extra cautious. The Texas Comptroller issued several key letter rulings in 2024–2025 that clarify—and restrict—COGS eligibility for software businesses. Let’s break down what was allowed, what was denied, and how you can stay compliant in 2025. […]