New Texas Exemptions

Exemption for Offshore Spill Containment System:  Tangible personal property that is used, or intended to be, solely in offshore spill response containment system is exempt from sales and use tax as of June 14, 2013 under House bill 1712. Services performed on qualifying property are also exempt.

An entity formed primarily for the purpose of designing, developing, modifying, enhancing, assembling, operating, deploying and maintaining an offshore spill response containment system must own the spill response containment system.

Research and Development Exemption:  Effective January 1, 2014, House Bill 800 will create an option for a sales and use tax exemption for the purchase, lease or rental of depreciable tangible personal property purchased by a person for direct use in qualified research.

The depreciable property must have a useful life exceeding one year and must be subject to depreciation. A credit may be claimed for franchise tax instead of sales tax exemption if engaged in qualified research.

If claiming the sales tax exemption, you will be required to complete an application and file an annual information report with the Comptroller.

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