Under the revised rule, a service will generally be performed at the location of the receipts- producing, end- product act or acts. The final regulation adds guidance on interpreting the location where a service is considered performed. If services are performed both inside and outside of Texas, then the receipts are attributed to Texas in proportion to the fair value of the services that are rendered in Texas. Texas law apportions receipts from providing services to the location where the services are performed. Perhaps the most significant change is the revised general rule for sourcing service receipts, which is applied if the service is not specifically addressed elsewhere (there are special rules for certain types of receipts, e.g., advertising services, internet hosting services, loan servicing activities).

An example of this: The revised general rule for sourcing service receipts 'is an exposition of the Comptroller's current interpretation of the sourcing statute, which has been endorsed in part by the Court of Appeals opinion in the Sirius XM Radio litigation.' Because the rule is applied both prospectively and retroactively, taxpayers must reassess past plays and think about upcoming audits. The explanatory text in the register provides that many of the additions or revisions are expositions of existing comptroller policy. As amended, this regulation significantly revises the rules for sourcing receipts to Texas, and almost all taxpayers, particularly those engaged in service industries, will be affected by the rule changes. This is somewhat like what happened when the Texas Comptroller's Office published the final version of revised Administrative Rule Section 3.591, Margin: Apportionment, in the Texas Register. Preparing tax returns is not as fun as watching a good football game, but in neither situation do taxpayers expect the rules to change at halftime. At times, these calls can and do change the outcome of the game. From peewee to NFL games, Texans are well accustomed to seeing flags thrown and penalties called midgame.

Example of gross receipts