Texas Codes

Tex. Tax Code § 171.1055 (2026)

Exclusion Of Certain Receipts For Margin Apportionment

✓ current as of May 2026

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Sec. 171.1055. EXCLUSION OF CERTAIN RECEIPTS FOR MARGIN APPORTIONMENT. (a) In apportioning margin, receipts excluded from total revenue by a taxable entity under Section 171.1011 may not be included in either the receipts of the taxable entity from its business done in this state as determined under Section 171.103 or the receipts of the taxable entity from its entire business done as determined under Section 171.105.

(b) In apportioning margin, receipts derived from transactions between individual members of a combined group that are excluded under Section 171.1014(c)(3) may not be included in the receipts of the taxable entity from its business done in this state as determined under Section 171.103, except that receipts ultimately derived from the sale of tangible personal property between individual members of a combined group where one member party to the transaction does not have nexus in this state shall be included in the receipts of the taxable entity from its business done in this state as determined under Section 171.103 to the extent that the member of the combined group that does not have nexus in this state resells the tangible personal property without substantial modification to a purchaser in this state. "Receipts ultimately derived from the sale" means the amount paid for the tangible personal property by the third party purchaser.

(c) In apportioning margin, receipts derived from transactions between individual members of a combined group that are excluded under Section 171.1014(c)(3) may not be included in the receipts of the taxable entity from its entire business done as determined under Section 171.105.

Amended by:

Acts 2006, 79th Leg., 3rd C.S., Ch. 1 (H.B. 3), Sec. 5, eff. January 1, 2008.

Acts 2007, 80th Leg., R.S., Ch. 1282 (H.B. 3928), Sec. 21, eff. January 1, 2008.

Notes of Decisions

Cited in 2 cases, 2016–2017 · leading case: Hallmark Mktg. Co., Llc v. Glenn Hegar, Comptroller of Pub. Accounts of the State of Texas, & Ken Paxton, Attorney Gen. of the State of Texas, 488 S.W.3d 795 (Tex. 2016).

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Hallmark Mktg. Co., Llc v. Glenn Hegar, Comptroller of Pub. Accounts of the State of Texas, & Ken Paxton, Attorney Gen. of the State of Texas, 488 S.W.3d 795 (Tex. 2016). “” Tex. Tax Code § 171.1055(a). The comptroller contends that because Hallmark accounted for its $628 million .”

Glenn Hegar, Comptroller of Pub. Accounts of the State of Texas & Ken Paxton, Attorney Gen. of the State of Texas v. Gulf Copper & Mfg. Corp. (Tex. 2017). “Under Tex. Tax Code § 171.1055, Gulf Copper may not include receipts excluded from total revenue in either the numerator or the denominator of its apportionment calculation.”

— Tex. Tax Code § 171.1055(a) — 1 case

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