The bill, S.B. No. 263, amends Section 171.1012(o) of the Texas Tax Code to clarify the computation of the cost of goods sold for television and radio broadcasters in relation to the franchise tax. The amendment specifies that taxable entities whose principal business activities include film or television production, television broadcasting, or radio broadcasting can elect to subtract their cost of goods sold. This cost includes expenses directly related to the acquisition, production, or use of property, such as depreciation and expenses for broadcasting rights.

Additionally, the bill defines "television or radio broadcasting" as activities conducted under a broadcast license issued by the Federal Communications Commission and regulated under specific federal regulations. The amendment is characterized as a clarification of existing law, ensuring that it does not suggest any inconsistency with prior interpretations. The bill is set to take effect immediately upon receiving a two-thirds vote from both houses or on September 1, 2025, if such a vote is not achieved.

Statutes affected:
Introduced: Tax Code 171.1012 (Tax Code 171)
Senate Committee Report: Tax Code 171.1012 (Tax Code 171)
Engrossed: Tax Code 171.1012 (Tax Code 171)