Feceipts tax, of roughly computed in on. The tax base (to which this rate is applied odified
Question:
Feceipts tax, of roughly computed in on. The tax base (to which this rate is applied odified gross rexable margin and revenue is one of the following ways: (1) total replied) is the entity's goods sold, (2) total revenue minus compensation, (3) total revenue imere venues minus cost of
enue minus $1 million. e you must evaluate whether this is considered a tax based on income and thus within the
scope of ASC 740. ance from PwC's Guide to Accounting for Income Taxes.3 example, consider the following guid-
In jurisdictions in which a tax is calculated on modified gross receipts, consideration should be given as to whether it is a tax based on income. We believe that a tax based on gross receipts reduced for certain costs (e.g., inventory, depreciable and amortizable assets, materialeipts supplies, wages) is a tax based on income subject to ASC 740.
Questions:
1. Is Texas's franchise tax within the scope of ASC 740? Explain.
2. Explain the significance (as further described in the text following this example) of a tax being within the scope of ASC 740 versus within the scope of other guidance.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill