Texas generally sources revenue from services to the location where the service was performed.
On March 25, 2022, the Texas Supreme Court rejected the “receipt producing, end-product act” test as a factor in determining the location of where a service is performed for apportionment sourcing purposes. On November 10, 2022, the Texas Court of Appeals, on remand, determined that the taxpayer’s cost-of-performance methodology was acceptable in determining the fair value of services performed in Texas.
Source PwC
