White Paper

3 Pages
  • 3 Pages

Research and Development Exemption

 

How are legislative and rule changes affecting manufacturers?

The legislature enacted a sales tax exemption for depreciable equipment used in research and development defined by reference to the Internal Revenue Code. The legislative intent was to encourage economic development in Texas related to research and development activities. This exemption has been widely applied by manufacturers. This white paper reviews the statute and defines what depreciable tangible personal property is and what qualifies as research and development activities.