Tex. Codes » Tax Code · TITLE 2. STATE TAXATION · SUBTITLE F. FRANCHISE TAX; CREDITS · CHAPTER 171. FRANCHISE TAX
Texas Codes

Tex. Tax Code § 171.108 (2026)

Deduction Of Cost Of Clean Coal Project From Margin Apportioned To This State

✓ current as of May 2026
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Sec. 171.108. DEDUCTION OF COST OF CLEAN COAL PROJECT FROM MARGIN APPORTIONED TO THIS STATE. (a) In this section, "clean coal project" has the meaning assigned by Section 5.001, Water Code.

(b) A taxable entity may deduct from its apportioned margin 10 percent of the amortized cost of equipment:

(1) that is used in a clean coal project;

(2) that is acquired by the taxable entity for use in generation of electricity, production of process steam, or industrial production;

(3) that the taxable entity uses in this state; and

(4) the cost of which is amortized in accordance with Subsection (c).

(c) The amortization of the cost of capital used in a clean coal project must:

(1) be for a period of at least 60 months;

(2) provide for equal monthly amounts;

(3) begin in the month during which the equipment is placed in service in this state; and

(4) cover only a period during which the equipment is used in this state.

(d) A taxable entity that makes a deduction under this section shall file with the comptroller an amortization schedule showing the period for which the deduction is to be made. On the request of the comptroller, the taxable entity shall file with the comptroller proof of the cost of the equipment or proof of the equipment's operation in this state.

Added by Acts 2005, 79th Leg., Ch. 1097 (H.B. 2201), Sec. 4, eff. June 18, 2005.

Amended by:

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

Notes of Decisions
Cited in 2 cases, 2011–2012 · leading case: Tgs-nopec Geophysical Co. v. Combs, 340 S.W.3d 432 (Tex. 2011).
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Tgs-nopec Geophysical Co. v. Combs, 340 S.W.3d 432 (Tex. 2011). “Because this data is not one of the intangible assets listed in subsection (4), TGS concludes that the receipts it derives from this data must instead be sourced as other business under the catchall provision, subsection (6), and allocated to the state of the payor’s domicile.”
In Re Nestle USA, Inc., 387 S.W.3d 610 (Tex. 2012). “Tex. Tax Code § 171.108. . Id. § 171.002(a), (b).”
Tex. Tax Code § 171.108(a)(4): 1 case
Tgs-nopec Geophysical Co. v. Combs, 340 S.W.3d 432 (Tex. 2011). “Because this data is not one of the intangible assets listed in subsection (4), TGS concludes that the receipts it derives from this data must instead be sourced as other business under the catchall provision, subsection (6), and allocated to the state of the payor’s domicile.”
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