Texas Margin Tax

Trucking companies continue to agonize over the June 15th date for filing and paying the Texas Franchise Tax. Most clients have seen their tax bills double, which in todays economy could be a kiss of death. The Texas Margin Tax, which is based on the concept of figuring your gross margins, and then multiplying a sales tax rate of 1% is onerous to the trucking company, since they are not a service provider, and cannot deduct as cost of goods, expenses for fuel, repairs, insurance etc. The tax does allow a deduction for salary wages and benefits, thus the margin is about 70% of the gross, taxed at 1%, then prorated for the mileage applicable to Texas vs. the entire mileage for all states. Pretty bad stuff.