Petition for Writ of Mandamus - Filed - Supreme Court of Texas

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After the due date or the extended due date of the report, a taxable entity may not amend its report to change its election to COGS or compensation. However, a taxable entity may amend its report to change its method of computing margin from COGS or compensation to 70% of total revenue or, if eligible, the EZ computation. Note: A taxable entity may elect to use COGS to compute margin ONLY if the taxable entity sells real or tangible personal property in the ordinary course of business OR if the taxable entity qualifies to compute COGS under any one of the exceptions noted in Texas Tax Code Section 171.1012 or Rule 3.588. The instructions for Items 1-7 and 9 below are for taxable entities that are filing as a separate entity and not as part of a combined group. A combined group should follow these specific instructions for each member of the group and then add across each item to determine the amounts that will be reported for the group. Intercompany eliminations should be reported on Item 9 as an exclusion from revenue. The amounts referenced in the instructions presume that a separate federal income tax return was filed by each separate taxable entity. If a taxable entity was part of a federal consolidated return or was disregarded for federal tax purposes and is not being treated as disregarded in a combined group report for franchise tax purposes, report the amounts on Items 1-7 and 9 as if the entity had filed a separate return for federal income tax purposes. The instructions for Items 11-13 and 15-17 below are also for taxable entities that are filing as a separate entity and not as part of a combined group. A combined group should follow these specific instructions for each member of the group, add across each item, and then subtract any intercompany eliminations to determine the amounts that will be reported. Eliminations may be made only to the extent that the related items of revenue were eliminated. The line items indicated in this section refer to specific lines from the 2011 Internal Revenue Service (IRS) forms. The statute and administrative rules base total revenue on specific line items from the 2006 IRS forms and state that in computing total revenue for a subsequent report year, total revenue: • is based on the 2006 equivalent line numbers on any subsequent version of that form and • is computed based on the Internal Revenue Code in effect for the federal tax year beginning on Jan. 1, 2007. The actual line numbers in the statute and rules are not updated to reflect subsequent changes in the federal form line numbering. Although the instructions are updated annually to reflect federal line numbering changes that affect total revenue, be aware that federal line numbers are subject to change throughout the year. FAQ #22 under Tax Rule 3.587 Margin: Total Revenue tracks the cumulative changes in federal form numbers. Item 1. Gross receipts or sales • For a taxable entity filing as a corporation for federal tax purposes, enter the amount from line le, 2011 Form 1120. 12 • For a taxable entity filing as an S corporation for federal tax purposes, enterthe amount from line 1 e, 2011 Form 1120S. • For a taxable entity filing as a partnership for federal tax purposes, enter the amount from line le, 2011 Form 1065. • For a taxable entity filing as a trust for federal tax purposes, enter the amount from line 3, Schedule C, Form 1040. • For a taxable entity that is a single member LLC filing as a sole proprietorship for federal tax purposes, enter the amount from line 3, Schedule C, Form 1040. • For a taxable entity filing a federal tax form other than those mentioned above, enter an amount that is substantially equivalent to the amounts discussed in this section. Item 2. Dividends • For a taxable entity filing as a corporation for federal tax purposes, enter the amount from line 4, Form 1120. • For a taxable entity filing as an S corporation for federal tax purposes, enter the amount from line 5a, Schedule K, Form 1120S. • For a taxable entity filing as a partnership for federal tax purposes, enter the amount from line 6a, Schedule K, Form 1065. • For a taxable entity filing as a trust for federal tax purposes, enter the amount from line 2a, Form 1041. • To the extent dividends earned by the LLC are included for a taxable entity registered as a single member LLC and filing as a sole proprietorship for federal tax purposes, enter the amount associated with dividends from line 6, Schedule C, Form 1040. • For a taxable entity filing a federal tax form other than those mentioned above, enter an amount that is substantially equivalent to the amounts discussed in this section. Item 3. Interest • For a taxable entity filing as a corporation for federal tax purposes, enter the amount from line 5, Form 1120. • For a taxable entity filing as an S corporation for federal tax purposes, enter the amount from line 4, Schedule K, Form 1120S. • For a taxable entity filing as a partnership for federal tax purposes, enter the amount from line 5, Schedule K, Form 1065. • For a taxable entity filing as a trust for federal tax purposes, enter the amount from line 1, Form 1041. • To the extent interest earned by the LLC is included for a taxable entity registered as a single member LLC and filing as a sole proprietorship for federal tax purposes, enter the amount associated with interest from line 6, Schedule C, Form 1040. • For a taxable entity filing a federal tax form other than those mentioned above, enter an amount that is substantially equivalent to the amounts discussed in this section. Item 4. Rents • For a taxable entity filing as a corporation for federal tax purposes, enter the amount from line 6,2011 Form 1120. • For a taxable entity filing as an S corporation for federal tax purposes, enterthe amount from line 3a, Schedule K, Form 1025S, and the amount from lines 18a and 19,2011 Form 8825. • For a taxable entity filing as a partnership for federal tax purposes, enterthe amount from line 3a, Schedule K, Form 1065 and the amount from line 18a, 2011 Form 8825.
• For a taxable entity filing as a trust for federal tax purposes, enter rents included in line 4, 2011 Form 1040, Schedule E. • For a taxable entity that is a single member LLC filing as a sole proprietorship for federal tax purposes, enter rents included in line 4, 2011 Form 1040, Schedule E, to the extent that it relates to the LLC. • For a taxable entity filing a federal tax form other than those mentioned above, enter an amount that is substantially equivalent to the amounts discussed in this section. Note: Do not include in Item 4 net rental income (loss) passed through from a partnership or S corporation on IRS Form K-1; report this amount in Item 7. This amount must also be included in Item 9 when subtracting "net distributive income from a taxable entity treated as a partnership or as an S corporation for federal tax purposes." Item 5. Royalties • For a taxable entity filing as a corporation for federal tax purposes, enter the amount from line 7, Form 1120. • For a taxable entity filing as an S corporation for federal tax purposes, enter the amount from line 6, Schedule K, Form 1120S. • For a taxable entity filing as a partnership for federal tax purposes, enterthe amount from line 7, Schedule K, Form 1065. • For a taxable entity filing as a trust for federal tax purposes, enter royalties included in line 4, 2011 Form 1040, Schedule E. • For a taxable entity that is a single member LLC filing as a sole proprietorship for federal tax purposes, enter royalties included in line 4, 2011 Form 1040, Schedule E, to the extent that it relates to the LLC. • For a taxable entity filing a federal tax form other than those mentioned above, enter an amount that is substantially equivalent to the amounts discussed in this section. Item 6. Gains/losses • For a taxable entity filing as a corporation for federal tax purposes, enter the amount from lines 8 and 9, Form 1120. • For a taxable entity filing as an S corporation for federal tax purposes, enter the amount from line 4, Form 1120S and lines 7, 8a and 9, Schedule K, Form 1120S. • For a taxable entity filing as a partnership for federal tax purposes, enter the amount from line 6, Form 1065 and lines 8, 9a and 10, Schedule K, Form 1065. • For a taxable entity filing as a trust for federal tax purposes, enter the amount associated with gains/losses from lines 4 and 7, Form 1041. • For a taxable entity that is a single member LLC filing as a sole proprietorship for federal tax purposes, enter the amount from line 16, Form 1040, Schedule D, to the extent that it relates to the LLC; and the amount from line 17, Form 4797, to the extent that it relates to the LLC. • For a taxable entity filing a federal tax form other than those mentioned above, enter an amount that is substantially equivalent to the amounts discussed in this section. Item 7. Other income • For a taxable entity filing as a corporation for federal tax purposes, enter the amount from line 10, Form 1120 to the extent not already included; and any total revenue passed from a lower tier entity under the tiered partnership election. • For a taxable entity filing as an S corporation for federal tax purposes, enter the amount from line 5, Form 1120S; line 10, Schedule K, Form 1120S to the extent not already included; and any total revenue passed from a lower tier entity under the tiered partnership election. • For a taxable entity filing as a partnership for federal tax purposes, enter the amount from line 4 and line 7, Form 1065; the amount from line 11, Schedule K, Form 1065 to the extent not already included; the amount from line 9 plus line 1d, or line 44, 2011 Form 1040, Schedule F; and any total revenue passed from a lower tier entity under the tiered partnership election. • For a taxable entity filing as a trust for federal tax purposes, enter the amount from line 8, Form 1041 to the extent not already included; the amount from line 6, Form 1040, Schedule C, that has not already been included; the amount from line 32 and line 37, Form 1040 Schedule E; the amount from line 9 plus line 1d, or line 44, 2011 Form 1040, Schedule F; and any total revenue passed from a lower tier entity under the tiered partnership election. • For a taxable entity that is a single member LLC filing as a sole proprietorship for federal tax purposes, enter the ordinary income or loss from partnerships, S corporations, estates and trusts from Form 1040 Schedule E, to the extent that it relates to the LLC; enter the amount from line 9 plus line 1d, or line 44, 2011 Form 1040, Schedule F, to the extent that it relates to the LLC; enter the amount from line 6, Form 1040, Schedule C, that has not already been included; and any total revenue passed from a lower tier entity under the tiered partnership election. • For a taxable entity filing a federal tax form other than those mentioned above, enter an amount that is substantially equivalent to the amounts discussed in this section. Item 8. Total gross revenue Total the amounts entered on Items 1 through 7. Item 9. Exclusions from gross revenue Only the following items may be excluded from gross revenue. See Rule 3.587 for additional information. Bad Debt Expense • For a taxable entity filing as a corporation for federal tax purposes, enter the amount from line 15, Form 1120. • For a taxable entity filing as an S corporation for federal tax purposes, enter the amount from line 10, Form 1120S. • For a taxable entity filing as a partnership for federal tax purposes, enter the amount from line 12, Form 1065. • For a taxable entity registered as a single member LLC and filing as a sole proprietorship for federal tax purposes, enter the amount associated with bad debt expense from line 27, Schedule C, Form 1040. • For a taxable entity filing as a trust for federal tax purposes, enter the amount associated with bad debt expense from line 15a, Form 1041. • For a taxable entity filing a federal tax form other than those mentioned above, enter an amount that is substantially equivalent to the amounts discussed in this section. Foreign Dividends and Foreign Royalties Enter the amount of foreign royalties and foreign dividends, including amounts reported under Section 78 or Sections 951-964, Internal Revenue Code, to the extent included in gross revenue. 13
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No. __________ In The Supreme Court
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TABLE OF CONTENTS IDENTITY OF PARTI
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Rylander v. Fisher Controls Int’l
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U.S. CONST. art. 1, § 8...........
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STATEMENT OF JURISDICTION Section 1
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STATEMENT OF FACTS I. The Margin Ta
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taxable entity and to owners of cer
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Texas. Id. Nestle conducts exclusiv
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the same standard for all taxpayers
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esults in an arbitrary amount of co
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As detailed above, each step of the
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twice the tax rate. There is no rat
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or activities within the taxing sta
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CERTIFICATE OF SERVICE I certify th
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Appendix 1 Texas Tax Code, Chapter
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TAX CODE CHAPTER 171. FRANCHISE TAX
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Page 87 and 88: TAX CODE CHAPTER 171. FRANCHISE TAX
Page 119 and 120: UNITED STATES CONSTITUTION AMENDMEN
Page 121 and 122: UNITED STATES CONSTITUTION ARTICLE
Page 123 and 124: Appendix 4 Texas Constitution Artic
Page 125 and 126: (f) The occupation tax levied by an
Page 127 and 128: C -ki§, rod, AO ;i* 2012 Texas Fra
Page 129 and 130: Report (Form 05-163) annually to af
Page 131 and 132: Final Reports An entity that ceases
Page 133 and 134: An affiliated group can include:
Page 135 and 136: entity at the address listed on the
Page 137: Specific Line Instructions for Each
Page 141 and 142: Item 11. Cost of goods sold (COGS)
Page 143 and 144: To compute Net Distributive Income
Page 145 and 146: Item 30, Tax due Item 28 multiplied
Page 147 and 148: e included in the combined group re
Page 149 and 150: Form 05-166 Texas Franchise Tax Aff
Page 151 and 152: Note: Do not enter any amount relat
Page 153 and 154: Appendix 6 Affidavit of Alan Pasets
Page 155 and 156: would have had a compensation deduc
Page 157 and 158: '32212 vet-. 35 ,3 :".f! A Texas Fr
Page 159 and 160: 2.2 Val:, 3 liTexpavel rixliter 05
Page 161 and 162: 7E2012 Vet- , 3.0 Texas Franchise T
Page 163 and 164: TE2C- 12 Vez' . 3. e. Texas Franchi
Page 165 and 166: TX2112 er, • ,q,p: Texas Franchis
Page 167 and 168: . 2 der, 3.4 Texas Franchise Tax Af
Page 169 and 170: TX2- 0 .4.2 Ver. 3. t+ ificode 1321
Page 171 and 172: TXS012 Ver. . 3,0 0,5-102 9-1 1 /30
Page 173 and 174: T2 12 05-102 ■.fRev 9-11/30# Tcot
Page 175 and 176: TX2012 Ver. 3.7 Ct 102 Rev 9- 1 1.'
Page 177 and 178: TX27.12. Var . Texas Franchise Tax
Page 179 and 180: TX201.2 ver. 05 102 (Rev 9-11/3c gi
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Page 183 and 184: :x1:12 Texas Franchise Tax Public I
Page 185 and 186: PAYER'S name, street address, city,
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Texas Comptroller of Public Account
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Exhibit A Nestle USA, Inc. Nestle T
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11E Co May 15, 2012 COMPTROLLER OF
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AFFIDAVIT OF DONALD DEERE 1. My nam
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Revised Draft 10/19/2011 Economic A
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CAUSE NO. Filed 12 June 15 P3:17 Am
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activities in Texas, it is subject
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determination of the tax rate, cont
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elationship to the value of the Pri
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excess of $330,000. See id. §§ 17
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discriminate against interstate com
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Petition for Writ of Mandamus - Filed - Supreme Court of Texas

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