Defines “qualified research expense” for this section and lets a taxable entity or the comptroller use statistical sampling procedures if IRS rules allow it.
Sec. 171.9202. QUALIFIED RESEARCH EXPENSE. (a) In this subchapter, "qualified research expense" means, subject to this section, the portion of the amount reported by a taxable entity as the entity's total qualified research expenses on line 48 of Form 6765, that is attributable to research conducted in this state. The term does not include any amount that is not paid or incurred by the taxable entity, a member of the entity's combined group, or a lower tier entity as provided by Section 171.9206. (b) For purposes of this section: (1) a reference to Form 6765 is a reference to Internal Revenue Service Form 6765 and includes a revised version of that form or a subsequent form with a different number or designation that substantially provides the same information as Form 6765; and (2) a reference to a line number on Form 6765 includes a different line number on a revised or subsequent form described by Subdivision (1) that substantially provides the same information as the line number originally referenced. (c) Notwithstanding Section 171.0001(9), for purposes of this section, a reference to an amount reported on a line number on Form 6765 is: (1) a reference to the amount entered on that line number to the extent the amount entered complies with federal law in effect for the federal tax year for which the form is filed with the Internal Revenue Service; (2) if an amended Form 6765 is filed by the taxable entity with the Internal Revenue Service before the expiration of the period for claiming a refund of federal income tax for the federal tax year for which the amended form is filed, a reference to the amount entered on that line number on the amended form; or (3) if the Internal Revenue Service has audited the federal income tax return of a taxable entity for a federal tax year for which the taxable entity filed Form 6765 with the Internal Revenue Service and the audit has been made final, a reference to the amount reported on that line number on the form as audited or adjusted by the Internal Revenue Service. (d) For purposes of determining the amount on line 48 of Form 6765 under this section: (1) a taxable entity or the comptroller may use statistical sampling procedures if the procedures are permitted by the Internal Revenue Service's Revenue Procedure 2011-42 or a successor publication issued by the service; and (2) expenses for supplies properly reportable by a taxable entity as qualified research expenses on either of those lines may not be excluded from the computation of those expenses for purposes of this subchapter on the basis that the supplies are taxable, nontaxable, or exempted from taxation under Chapter 151. (e) Notwithstanding any other provision of this subchapter, if the Internal Revenue Service or the comptroller determines that a taxable entity has satisfied the requirements of the Internal Revenue Service to accept as sufficient evidence of the entity's qualified research expenses the entity's adjusted Accounting Standards Codification 730 financial statement research and development costs for a federal tax credit year, then the portion of those adjusted costs that is related to research conducted in this state is sufficient evidence of the entity's qualified research expenses for that federal tax credit year for purposes of this subchapter. Added by Acts 2025, 89th Leg., R.S., Ch. 1183 (S.B. 2206), Sec. 1, eff. January 1, 2026.