Opinion No.

Honorable Bob Bullock Comptroller of Public Accounts L.B.J. Building Austin, Texas 78711

Re: Franchise tax reporting of corporation's investment in a subsidiary

Dear Mr. Bullock:

You request our opinion on the proper method to value a corporation's investment in subsidiaries for franchise tax purposes.

Any corporation authorized to do business in Texas must pay franchise tax. Tex.-Gen. art. 12.01(1). The three alternative methods yields the greatest tax. Id. One method taxes at the statutory rate, the portion of a corporation's stated capital, surplus, and individual profits, which is allocable…