Personal income taxes: credit for taxes paid: S corporation: Texas Cost of Goods Sold Method.

The Personal Income Tax Law allows a credit against the net tax imposed by that law to residents for net income taxes paid to another state on income derived from sources within that state. This bill, for taxable years beginning on or after January 1, 2020, and before January 1, 2025, would provide that the credit allowed to residents for net income taxes paid to another state on income derived from sources within that state includes taxes paid by an S corporation that were calculated using the Cost of Goods Sold Method, as specified in the Revised Texas Franchise Tax, imposed by the State of Texas. The bill would require the Franchise Tax Board to provide the Legislature with a biannual report regarding the credit, as provided. This bill would take effect immediately as a tax levy.