A corporation may be exempt from franchise tax if its only in-state activity is certain order solicitation at qualifying trade shows and the solicitation is only occasional.
Sec. 171.084. EXEMPTION--CERTAIN TRADE SHOW PARTICIPANTS. (a) A corporation is exempted from the franchise tax if: (1) the only business activity conducted by or on behalf of the corporation in this state is related to the solicitation of orders conducted by representatives of the corporation who: (A) solicit orders of personal property to be sent outside this state for approval or rejection by the corporation and, if approved, to be filled by shipment or delivery from a point outside this state; or (B) solicit orders in the name of or for the benefit of a customer or prospective customer of the corporation, if the orders are filled or intended to be filled by the customer or prospective customer of the corporation by making orders to the corporation described by Paragraph (A) of this subdivision; and (2) the solicitation of orders is conducted on an occasional basis at trade shows: (A) promoted by wholesale centers; (B) promoted by nonprofit trade or professional associations for the purpose of facilitating the solicitation of orders from members of the trade or profession; or (C) held at municipally or county-owned convention centers or meeting facilities. (b) For purposes of this section, the solicitation of orders is conducted on an occasional basis only if the solicitation is conducted during not more than five periods during the business period of the corporation to which a tax report applies and if no single period during which solicitation is conducted is longer than 120 hours. (c) In this section, "wholesale center" means a permanent wholesale facility that has permanent tenants and that promotes at least four national or regional trade shows in a calendar year. A tenant leasing space at a wholesale center for a period longer than the period prescribed by Subsection (b) may qualify for the exemption provided by this section only if the tenant solicits orders on an occasional basis at the trade show as prescribed by Subsection (b). Added by Acts 1987, 70th Leg., ch. 778, Sec. 1, eff. May 1, 1988. Amended by Acts 2003, 78th Leg., ch. 209, Sec. 34, eff. Oct. 1, 2003.