Franchise Tax – Rule 3.588

The Tax Policy Division recently hosted a roundtable discussion on Rule 3.588 related to margin and the costs of goods sold. The roundtable discussion was based on a draft rule amendment that was sent to representatives of various businesses who had participated in a work group on the issue of qualifying labor costs for Cost of Goods Sold. The amendment has not been formally proposed in the Texas Register.

We’ll be holding more roundtables to allow interested people to have input in the rules we propose, and we’ll keep you informed of upcoming events through this newsletter.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at