(a) There are exempt from the taxes imposed by this chapter service transactions among affiliated entities, at least one of which is a corporation, that report their income to the Internal Revenue Service on a single consolidated return for the tax year in which the transaction occurs.
(b) For purposes of this section, “affiliated entity” includes an entity that would be classified as a member of an affiliated group under 26 U.S.C. § 1504 but for the exclusions provided by that section.

Terms Used In Texas Tax Code 151.346

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Tax year: means the calendar year. See Texas Tax Code 1.04

(c) An exemption authorized by this section does not apply to a service that would have been taxable under this chapter as it existed on September 1, 1987.
(d) Services that are exempt under this section may not be purchased for resale by the providing company.
(e) Tangible personal property that is transferred as an integral part of a service exempted under this section may not be purchased for resale by the providing company.

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