Texas – Compensation regulation invalid, benefit costs deductible for federal purposes may be included in margin tax compensation deduction

A Texas district court found a margin tax regulation invalid to the extent that it prevents taxpayers from deducting as compensation certain benefit costs that are deductible for federal income tax purposes.

Texas taxpayers taking the compensation deduction and incurring certain benefit costs should ensure such costs are deducted prospectively and should consider the potential for filing refund claims. [Winstead PC v. Combs, District Court, 201st District, No, D-1-GN-12-000141 (3/18/2013)]

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