Beginning with the 2011 Texas Franchise report year, there is a new filing requirement for the reporting entity of a combined group if that entity had previously preserved a temporary credit for business loss carry forward for itself and/or one of its affiliates. The reporting entity will be required to submit information regarding common ownership of the combined group.

Who is the common owner?

• The common owner is the entity or individual who owns 50% or more, either indirectly or directly, of each member of the combined group.

This reporting requirement will be annual, and will be due at the same time as the franchise report. The information must be submitted regardless of whether or not the entity is claiming a credit on the current year’s return or not.

Unfortunately, the report has to be filed using Webfile, as there is currently no form available from the Comptroller’s office. Basically, this means that you will now have to file in two separate ways:

• The regular franchise report will be prepared using the appropriate form and then mailed.
• The ownership information must be filed online.

In order to Webfile, you will need:

• Webfile number.
• Texas Taxpayer Number to log in for the first time.
• If you have used Webfile in the past, you will need your username and password.
• You also will need to have the social security number or Federal Employer Identification number of the common owner.
• Address of the common owner.
• The date the common owner first owned a more than 50% interest in the combined group.

In order to fully satisfy the franchise filing requirements, the common ownership information must be submitted. Your account will fall out of good standing if the common ownership report is not filed annually.

If you need to correct information previously filed for the common ownership, you must do so in writing by sending an explanation to the Comptroller by mail to:

• State Comptroller, P.O. Box 149348, Austin, TX 78714-9348.
• You will not be permitted to file corrections by Webfile.

By: Ronna Beemer, CPA
PriceKubecka, PLLC