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Texas Qualified Research RegistrationQualified Research Exemption

Entities not currently registered with our office for sales tax, franchise tax or other taxes or fees are not eligible to complete the online registration. You must print and submit an application.

Information required in order to complete this registration:

  • 11-digit Texas taxpayer number, or
  • Texas Secretary of State file number, or
  • 9-digit federal identification number

This information is required for the previous calendar year. Entities that were not engaged in qualified research in the prior year must enter a zero.

  • Total amount of all purchases in Texas that qualify for exemption under Texas Tax Code Section 151.3182. For purchases prior to 2014, estimate the purchases that would have qualified for the exemption if the legislation was in effect.
  • Total of all qualified research expenses in Texas
  • Number of full-time employees engaged in qualified research in Texas
  • Number of part-time employees engaged in qualified research in Texas
  • Payroll expenses for all employees included in Items 3 and 4

Print a copy of this registration for your records.

What is Qualified Research?

Qualified research is research for which expenditures may be treated as expenses under Section 174, Internal Revenue Code.

The research must be undertaken for discovering information that is technological in nature, and its application must be intended for use in developing a new or improved business component.

Substantially all of the activities of the research must be elements of a process of experimentation relating to a new or improved function, performance, reliability or quality.

Qualified research does not include the following activities:

  • research related to style, taste, cosmetic or seasonal design factors;
  • research conducted after the beginning of commercial production of the business component;
  • research adapting an existing product or process to a particular customer’s need;
  • duplication of an existing product or process;
  • surveys or studies;
  • research relating to certain internal-use computer software;
  • research conducted outside the United States, Puerto Rico, or a U.S. possession;
  • research in the social sciences, arts or humanities; or
  • research funded by another person or governmental entity.

Who Qualifies?

This registration may be completed to obtain a registration number for use when purchasing qualifying tangible personal property to be used in qualified research under Section 151.3182.

Depreciable tangible personal property is tangible personal property that:

  • has a useful life of more than one year; and
  • is subject to depreciation under either generally accepted accounting principles (GAAP) or Section 167 or 168 of the Internal Revenue Code. For federal income tax purposes, a depreciation deduction, generally, is a reasonable allowance for the exhaustion, wear and tear and, in some cases for the obsolescence, of certain business related or income producing property. For the purpose of the sales tax exemption the depreciable item must be directly used in qualified research.

The exemption can be claimed on the purchase, lease, rental, storage or use of depreciable tangible personal property directly used in qualified research. To claim the exemption, the purchaser must include the RD registration number issued by the Comptroller on the Qualified Research Sales and Use Tax Exemption Certificate (Form 01-931).

Examples of items that qualify for exemption include tools and machinery.

Non-qualifying items include electricity and natural gas.

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