Texas Comptroller Determines Revenue Sharing Agreement Between District, Radiologists Created Entity Subject to Franchise Tax

The Texas Comptroller of Public Accounts June 21 determined in a letter ruling that a revenue sharing agreement created a taxable entity for corporate income tax purposes. Radiologists and a district entered into the agreement, which they renewed with the amended and restated Net Revenue Agreement. The parties inquired whether the revenue sharing agreement created an entity subject to the franchise tax. The comptroller found: 1) the parties were engaged in the joint prosecution of a particular transaction providing radiology treatment and related services for mutual profit; 2) the district’s arguments that it wasn’t engaged in a particular transaction were ...