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The Texas Comptroller of Public Accounts has today published proposed amendments to the Franchise Tax rules governing the Cost of Goods Sold (COGS) deduction. The revisions were released in the Texas State Register and are now open for public comment until May 3, 2026.
These proposed changes to the Texas Franchise Tax COGS deduction aim to clarify and update how businesses calculate and claim this important deduction when determining their taxable margin. The adjustments could have a direct impact on the franchise tax liability of many corporations operating in Texas, particularly those with complex supply chains or significant cost of goods sold.
Businesses and tax professionals are encouraged to review the proposed rules carefully. The Comptroller is accepting written comments during the 30-day period, giving affected companies the opportunity to provide input before the final regulations are adopted.
For multinational corporations and Texas-based businesses, these potential revisions to the Texas Franchise Tax COGS deduction represent an important development that may require updates to tax planning and compliance strategies for the 2026 and future tax years.
