JUSTICE BLACKLOCK delivered the opinion of the Court. Sirius XM Radio produces radio programming, which it transmits using satellites. Subscribers pay monthly fees to access Sirius’s programming. To calculate the franchise tax it owes to the State of Texas, Sirius must first calculate its “receipts from . . . each service performed in this state.” TEX. TAX CODE § 171.103(a). The principal question before this Court is whether Sirius’s monthly subscription fees from Texas users are receipts from a “service performed in this state.” Sirius argues that the service it performs for its Texas subscribers is the production of radio shows and the transmission of a radio signal, nearly all of which takes place outside Texas. According to Sirius, a service is “performed in this state” if the people or equipment performing the service are physically located in Texas. The Comptroller disagrees. It argues that the service Sirius performs for its Texas subscribers is the provision of access to its encrypted radio signal, which takes place on each subscriber’s radio in Texas. The Comptroller reads the Tax Code to allocate services to Texas if the “receipt-producing, end-product act” takes place in this state. Here, the Comptroller contends, the “receipt- producing, end-product act” is the enabling of each subscriber’s radio to receive Sirius’s signal. As explained below, we agree with Sirius. We therefore reverse the judgment of the court of appeals and remand the case to that court for consideration of the parties’ remaining arguments. I A Texas’s franchise tax is calculated by multiplying the taxable entity’s “taxable margin” by the tax rate. TEX. TAX CODE § 171.002. Determining an entity’s “taxable margin” requires three steps: margin calculation, apportionment, and deductions. Id. § 171.101(a). Entities first calculate their “margin,” which is generally a percentage of their total revenue. Id. § 171.101(a)(1). The next step is “apportioning the taxable entity’s margin to this state as provided by Section 171.106.” Id. § 171.101(a)(2). This step yields the “apportioned margin.” Id. The apportioned margin is calculated by multiplying the margin by a fraction, whose “numerator . . . is the taxable entity’s gross receipts from business done in this state” and whose “denominator . . . is the taxable entity’s gross receipts from its entire business.” Id. § 171.106(a). Finally, subtracting allowable deductions from the apportioned margin yields the entity’s “taxable margin,” to which the tax rate is applied. Id. § 171.101(a)(3). Only the second step—apportionment to Texas—is at issue here. Determining the apportioned margin requires calculating what percentage of the entity’s gross receipts are “from business done in this state.” Id. § 171.106(a). Section 171.103 describes the required calculation. The only element of the calculation in dispute is “the taxable entity’s receipts from . . . each service performed in this state.” Id. § 171.103(a)(2). The parties’ principal disagreement is whether Sirius’s receipts from subscriber fees paid by Texas customers are “from . . . service performed in this state.” Id. The Tax Code authorizes the Comptroller to adopt lawful rules for “the collection of taxes and other revenues under this title,” which includes Chapter 171. Id. § 111.002. The administrative rules applicable to this case provided that receipts from services “are apportioned to the location where the service is performed,” and if services are performed in more than one state, then the value apportioned to Texas is the “fair value of the services that are rendered in Texas.” 32 Tex. Reg. 10044, 10047 (2007), amended in part by 46 Tex. Reg. 460 (2021) [hereinafter former 34 TEX. ADMIN. CODE § 3.591(e)(26)]. B Sirius broadcasts more than 150 satellite-radio channels, over 70% of which run exclusively original content produced by Sirius. The content is produced in studios mainly located in New York City and Washington, D.C., although Sirius ran a small radio show in Texas for a time. Content is broadcast by transmitting it to satellites from uplink facilities in New Jersey, D.C., and Georgia. The satellites are launched from Kazakhstan. Sirius has ten satellites orbiting 22,000 miles above the earth. They transmit the signals they receive back down to Earth, where they either reach radio sets or, in densely populated areas, one of Sirius’s seven hundred terrestrial repeaters (twenty-two of which are in Texas) that supplement its satellite coverage. The satellites are controlled by Sirius’s facilities in Panama, Ecuador, and Georgia.[1] Once the signal reaches a customer’s radio, a “chip set”—that is, a pair of integrated circuits—decrypts the radio signal, allowing the listener to hear the programming. Customers can access Sirius’s content by purchasing one of Sirius’s radio sets and paying a subscription fee. Sirius has agreements with auto makers to ensure that new vehicles have Sirius-enabled radios installed. Subscribers typically purchase or lease vehicles with the radios installed rather than purchasing and installing their own. Each subscription is tied to one radio set. When a customer pays a subscription fee, Sirius sends a signal from New York or D.C. that activates the chip set in the satellite radio, which permits the chip set to decrypt radio signals. In many cases, new automobiles come with an active Sirius radio set, so Sirius sends a signal to deactivate and thereby encrypt the radio signal only if the purchaser fails to renew the subscription after his trial period ends. Subscription fees are the primary source of Sirius’s revenue. The chip set, which is equipped with technology to receive the activation signal and decrypt radio signals, is located in the radio set, but—save for a small number of terrestrial repeaters servicing a limited area— none of the equipment or personnel used to send activation signals to initiate decryption is located in Texas. Sirius creates content in various states, but very little of it is made in Texas.[2] It has many subscribers in Texas. In 2009 and 2010, Sirius paid franchise taxes in Texas. Those tax years are at issue here. In calculating its margin, Sirius was permitted to deduct from its revenue the “cost of goods sold” (COGS). TEX. TAX CODE § 171.1012. Sirius included in that deduction certain revenue-sharing payments and subsidies it paid to automobile manufacturers to have its radios installed in vehicles. Sirius then apportioned its reported subscription receipts for each year based on the locations where it produced its programming and on the relative costs of those activities in Texas and elsewhere. The Comptroller’s Office audited Sirius. It determined that Sirius should apportion based on the location of its subscribers, not based on the location where its programs are produced. The Comptroller claimed Sirius underpaid by $878,364.39 for the 2010 tax year and $1,674,907.38 for the 2011 tax year. According to the Comptroller, the “service performed in this state” by Sirius was the service of “unscrambling” the radio signal. The Comptroller reached this conclusion based on its position that services must be apportioned to the state in which the “receipt-producing, end-product act” takes place. Additionally, in the Comptroller’s view, Sirius could not take a COGS deduction for the revenue-sharing and subsidy agreements because they did not qualify as “direct costs of acquiring or producing the goods.” TEX. TAX CODE § 171.1012(c). Sirius paid the assessed tax under protest, id. § 112.052, and sued in district court in Travis County for a refund. Sirius did not dispute that it performed a small amount of services in Texas, but it claimed that the vast majority of its work in producing and broadcasting content was performed elsewhere. The district court found that Sirius’s “receipt-producing, end-product act” was producing and broadcasting its content over satellite radio, not decrypting radio signals. It held that Sirius performed this service both inside and outside of Texas and that its receipts must therefore be apportioned to Texas based on the fair value of the service performed in Texas. The court heard expert testimony from Sirius, which included a cost study to determine the fair value of its services performed in Texas. The court found this analysis to be a credible method for determining fair value. The Comptroller did not provide an opposing calculation on the fair-value question or offer any of its own witnesses, instead arguing that the burden of proof was on Sirius. The Comptroller maintained that Sirius’s cost of performance was not valid evidence of fair value. The district court found that Sirius performed its services almost exclusively outside Texas. It apportioned to Texas only 0.47% and 0.26% of Sirius’s total receipts from the two years in question, whereas the Comptroller would have apportioned 8.3% and 8.36%, respectively. The court rendered judgment for Sirius and ordered the Comptroller to refund over $2 million to Sirius. The court affirmed the Comptroller’s denial of the disputed COGS deduction. The Comptroller appealed the apportionment issue, and Sirius filed a conditional cross-appeal concerning the COGS deduction. The court of appeals reversed and rendered a take-nothing judgment against Sirius. Agreeing with the Comptroller’s position that the phrase “service performed in this state” in Section 171.103(a)(2) refers to the “receipt-producing, end-product act,” the court of appeals held that the service performed by Sirius for Texas subscribers was unscrambling the radio signal. 604 S.W.3d 125, 132–33 (Tex. App.—Austin 2020). The court thus agreed with the Comptroller on how to apportion Sirius’s receipts to Texas. The court then held that the comparative cost of Sirius’s activities inside and outside of Texas was not credible evidence of fair value under its understanding of how to apportion Sirius’s receipts. Id. at 135. The court of appeals also affirmed the district court’s judgment regarding Sirius’s claimed COGS deduction. Id. at 137. Sirius petitioned for review. It challenges only the court of appeals’ holding that its receipts from Texas subscribers should be apportioned to Texas. II A The parties’ disagreement is largely one of statutory interpretation. The correct interpretation of a statute is a matter of law, which we review de novo. Youngkin v. Hines, 546 S.W.3d 675, 680 (Tex. 2018).[3] The parties also raise arguments concerning judicial deference to a state agency’s interpretations of statutes. Texas courts have not adopted the agency-deference doctrines employed by federal courts. R.R. Comm’n v. Tex. Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 625 (Tex. 2011). Instead, this Court has said that “we will generally uphold an agency’s interpretation of a statute it is charged by the Legislature with enforcing, so long as the construction is reasonable and does not contradict the plain language of the statute.” Id. (cleaned up). Of course, a court must always endeavor to decide for itself what the statutory text means so that it can determine whether the agency’s construction contradicts the statute’s plain language. Tex. Comm’n on Env’t Quality v. Maverick County, S.W.3d , 2022 WL 413939, at *4 (Tex. Feb. 11, 2022). The primary issue before this Court is whether Sirius’s receipts from Texas subscribers are receipts from a “service performed in this state.” TEX. TAX CODE § 171.103(a)(2). Sirius argues that it performs little or no services in Texas. In its view, the phrase “service performed in this state” means that the personnel or equipment performing the service must be physically located in Texas. Sirius contends that the service it performs is not the decryption of radio signals but the production and broadcasting of radio content, which happens outside Texas. The Comptroller agrees that the proper test is the location where the service is performed, not the location where the service is received. But it contends that Sirius’s subscribers pay for decryption services in order to access the broadcasted content and that Sirius performs this service where the technology within the radio set is located. Therefore, the Comptroller concludes, the value must be apportioned to Texas, which is the location of the “receipt-producing, end-product act” of unscrambling the radio signal. Again, the Tax Code requires apportionment based on whether receipts are from a “service performed in this state.” Id. § 171.103(a)(2). But how does a court determine what a “service” is and where it is “performed”? This is not the first case to raise such questions. We have previously understood “service” to mean “performance of labor for the benefit of another.” Van Zandt v. Fort Worth Press, 359 S.W.2d 893, 895 (Tex. 1962); see also Combs v. Newpark Res., Inc., 422 S.W.3d 46, 54 (Tex. App.—Austin 2013, no pet.) (noting that “service” is “useful labor that does not produce a tangible commodity”). As for “performed in this state,” we have previously looked to whether the “act done” is “located in Texas.” Humble Oil & Refin. Co. v. Calvert, 414 S.W.2d 172, 180 (Tex. 1967). We see no reason to depart from these straightforward understandings of the everyday words the statute uses. A “service” is “performed in this state” if the labor for the benefit of another is done in Texas. Generally, all it takes to know where a taxable entity’s “useful labor” is “done” is to ask where the employees do their work, since businesses act only through their agents. When technology rather than personnel performs the useful act, we look to the location of that equipment, as the Comptroller and courts of appeals have done. Hearing No. 10,028, 1980 WL 5466, at *5 (Tex. Cptr. Pub. Accts. Nov. 27, 1980) (looking to the “point of transmission” from broadcasting equipment); Westcott Commc’ns, Inc. v. Strayhorn, 104 S.W.3d 141, 147 (Tex. App.—Austin 2003, pet. denied) (looking to the location of “employees” and “facilities”). We reject the contrary inference that the Legislature, by choosing the passive voice—”performed in this state”—meant for us to ignore the location of the service performer and focus only on the location where the performance is received or its effects felt. The Legislature could have easily designated the place of receipt or the location of the customer as the site of taxation. In fact, the Legislature did so in the immediately preceding provision, which calls for apportionment based on “each sale of tangible personal property if the property is delivered or shipped to a buyer in this state.” TEX. TAX CODE § 171.103(a)(1) (emphasis added). In its original context in an administrative hearing decision, the “receipt-producing, end-product act” test advanced by the Comptroller is not to the contrary.[4] It served only to distinguish between the “support services” that enable the entity to do business and the “receipt- producing” services for which a customer actually pays. As originally employed, the test aimed to tell the Comptroller what qualifies as the “service performed.” It did not tell the Comptroller where a service is performed. Here, however, the Comptroller would use the “receipt-producing, end-product act” test to determine the location of the service. If pressed into this role, the test is not consistent with the statute. Mechanical application of the test would often require courts to focus on the location where the service is received. But the Legislature chose the word “performed”—not “received”—and any test that blurs this critical distinction parts ways with the statute. The focus should be on the statutory words themselves, not on extraneous concepts like “receipt-producing” or “end-product act,” which do not appear in the statute and, when applied, may or may not yield the same result as a straightforward application of the words chosen by the Legislature. That is not to say the statutory text is always easy to apply. It is not. But it should not be replaced by words of limitation or expansion not chosen by the Legislature. Setting aside the atextual and unhelpful “receipt-producing, end-product act” test, the most natural reading of “service performed in this state” supports locating the performance of the service at the place where the taxpayer’s personnel or equipment is physically doing useful work for the customer. B What the text suggests, past precedent confirms. Apportionment goes back to at least 1959, when the predecessor to the present statute was adopted. Act of July 30, 1959, 56th Leg., 3d C.S., ch. 1, § 1, 1959 Tex. Gen. Laws 187. The 1959 statute itself was merely a “codification of long-standing departmental practices.” Humble Oil & Refin. Co., 414 S.W.2d at 180. In general, the taxes many states impose on service businesses can be sorted into “origin-based” and “destination-based” varieties, or those that look to where the service originates versus those that look to where it is received. See JEROME R. HELLERSTEIN ET AL., STATE TAXATION
