![]() ![]() We also looked at the costs of producing different dosage forms of small-molecule products, in particular, oral solid doses (OSDs) and sterile liquids (SLs). Our benchmark study explored the differences in the costs of producing generic small-molecule and biosimilar drugs. While implementation details will depend on the individual firm’s business models, markets, and manufacturing network, the potential savings can be as high as 30%. By carefully managing COGS, generic drug companies can improve their competitiveness dramatically. Portfolio complexity has a huge impact, so companies need to monitor that complexity constantly. Scale can help reduce small-molecule and biosimilar per-unit costs, but only to a point. The study, which included a range of global leading firms and local champions from the US, Europe, and Asia, found that the cost of goods sold as a percentage of revenue (COGS%) varies widely. Generic small-molecule and biosimilar pharmaceutical companies have rightly taken steps to control COGS by reducing material and labor expenses-but those steps aren’t always enough.īCG’s 2019 Generics COGS Benchmark provides some valuable insights. Yet with competition growing increasingly cutthroat, the success of an entire product family can hinge on the gross margin of a SKU in a single market. Many generic pharmaceutical companies don’t know what really drives the cost of goods sold (COGS) at the level of the single stocking-keeping unit-and consequently cannot effectively manage these costs. Technology, Media, and Telecommunications.Working with a Texas CPA, like Austin CPA David French, can set you on the right path to painlessly filing your 2022 Texas Franchise Tax Report. Not applying the reduced 0.375 rate for retailers and wholesalersĬalculation methods, available credits, billing/contracting changes…it’s a lot to think about.Not realizing some real estate providers may qualify for the COGS deduction.Double counting income that was already reported on a flow-through franchise return.Not structuring commission agreements so that the commission expense is an exclusion.Missing exclusions for Medicaid and Medicare income (for medical providers).This will also help avoid some of the other common mistakes we’ve seen, such as: This will ensure that when it’s time to file, the most optimal method to calculate the franchise tax due can be used. What is the biggest mistake businesses make when filing their Texas franchise tax?Īs a general rule, businesses need to keep good records of two key components: sales by state and cost of goods sold (both direct and indirect). Do you have to pay Texas franchise tax if you’re not headquartered in Texas?Īs of January 1st 2020, out-of-state taxable entities with annual gross receipts over $500,000 from business in Texas must file a Franchise Tax Report even if the entity has no physical presence in this state. Manufacturing and retail, on the other hand, do have the COGS deduction as well as the advantage of a reduced 0.375% tax rate, both of which help minimize their tax burden. Service industries, especially those with a low employee count, are generally the most affected by the Texas franchise tax as they do not have a COGS deduction. What businesses does the Texas franchise tax impact the most? Only businesses with an annualized total revenue of $20M or less qualify for EZ Computation EZ Computation* – Total revenue times apportionment factor, then apportioned total revenue times tax rate of 0.331%.Total revenue minus cost of goods sold (COGS).The Texas franchise tax calculation is based on margin, which can be calculated using one of the following methods: How is the Texas franchise tax calculated? ![]()
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