Justia Texas Supreme Court Opinion Summaries

The dispute arose after the City approved a light rail project and formed a corporation, Austin Transit Partnership (ATP), to implement it. Voters approved a tax increase to fund the endeavor, and ATP—not the City—planned to issue municipal bonds. Taxpayers challenged ATP’s authority to issue these bonds, leading the City and ATP to seek a declaratory judgment confirming their power to assess taxes and issue bonds. The Attorney General, participating as permitted by statute, filed a plea to the jurisdiction, contending neither the City nor ATP qualified as an “issuer” under the statute governing expedited declaratory judgment actions.In the District Court, the City and ATP sought a quick resolution so the project could proceed, while the taxpayers and Attorney General desired delay. ATP’s counsel advised the court not to rule on the Attorney General’s plea to the jurisdiction, thus avoiding an interlocutory appeal and the associated automatic stay. The court accepted this suggestion, explicitly refusing to rule on the plea and moving forward toward trial. The Attorney General then filed a notice of interlocutory appeal, arguing the court’s actions amounted to an implicit denial. The trial court reiterated it had not ruled, and the Court of Appeals for the Fifteenth District dismissed the appeal, finding no order granting or denying the plea and therefore no appellate jurisdiction.The Supreme Court of Texas reviewed the case, holding that a trial court must rule on jurisdictional challenges before proceeding to the merits and cannot strategically avoid issuing a ruling to frustrate the government’s appellate rights. Because the absence of a ruling deprived the State of its statutory right to interlocutory appeal, and no adequate remedy by appeal existed, the Court treated the Attorney General’s petition as a request for mandamus and conditionally granted relief, directing the trial court to rule on the plea to the jurisdiction. The judgment of the Court of Appeals was left undisturbed. View "PAXTON v. THE CITY OF AUSTIN" on Justia Law

A group of individual taxpayers residing in Willacy County and a local school district challenged the ongoing collection of an ad valorem tax by the South Texas Independent School District (STISD). The tax was originally authorized in 1974 by a vote of Willacy County residents for a rehabilitation district serving persons with disabilities. Over time, STISD’s mission expanded, and the plaintiffs alleged that it no longer primarily serves disabled persons, which they claim deviates from the original purpose approved by voters. The individual taxpayers asserted they were directly harmed by the collection of this tax, while the local school district argued that the tax created financial disadvantages and competitive harm due to double taxation and unequal funding.The case was first heard by a trial court, which denied STISD’s plea to the jurisdiction, allowing the plaintiffs’ claims to proceed. On interlocutory appeal, the Court of Appeals for the Thirteenth District of Texas reversed, holding that both the taxpayers and the local school district lacked standing. The appellate court reasoned that the taxpayers’ claims, if allowed, risked significant disruption of government operations and did not meet the requirements for taxpayer standing. It also found that the school district failed to allege a concrete or particularized injury.The Supreme Court of Texas reviewed the case and determined that the appellate court erred in dismissing the individual taxpayers’ claims for lack of standing. The Supreme Court held that the individual taxpayers had standing under the traditional constitutional test because they alleged a particularized, personal financial injury traceable to STISD’s actions, and their requested relief would redress that injury. However, the Court affirmed the dismissal of the local school district’s claims, finding its alleged injuries too speculative and not directly traceable to STISD. The case was remanded to the appellate court to consider other unresolved jurisdictional issues. View "BUSSE v. SOUTH TEXAS INDEPENDENT SCHOOL DISTRICT" on Justia Law

RJR Vapor, a company selling oral nicotine products in Texas, including VELO nicotine pouches, sought a tax refund after paying the Texas Cigars and Tobacco Products Tax under protest. VELO pouches consist of a porous material filled with a dry mixture of microcrystalline cellulose (a plant-based substance) and nicotine isolate, along with flavorings and preservatives. Unlike traditional tobacco pouches, which use ground tobacco leaf, VELO uses non-tobacco plant matter combined with nicotine extracted from tobacco leaves. The key legal question was whether these pouches qualify as “tobacco products” under Texas Tax Code, specifically as products “made of tobacco or a tobacco substitute.”After RJR paid the tax and filed suit, the trial court ruled in RJR’s favor, finding that VELO pouches are not taxable tobacco products and granting a refund. The trial court also found the statutory phrase “made of tobacco or a tobacco substitute” unconstitutional, both facially and as applied. The Court of Appeals for the Third District of Texas affirmed, agreeing that VELO pouches are neither “made of tobacco” nor “made of . . . a tobacco substitute,” and declined to reach RJR’s constitutional challenges, considering them moot because the products were not taxable.The Supreme Court of Texas reviewed the case and reversed the decision of the court of appeals. The Supreme Court held that VELO pouches are “made of . . . a tobacco substitute” because their primary ingredients—plant matter and nicotine—take the place and function of tobacco in products expressly taxed by the statute, such as snus or moist snuff. The Court rendered judgment that VELO pouches are taxable tobacco products under Texas law and remanded the case to the court of appeals to consider RJR’s equal-and-uniform constitutional challenge to the tax. View "HANCOCK v. RJR VAPOR CO., LLC" on Justia Law

A Texas-based company sold bunker fuel to primarily foreign-registered vessels at Texas ports, transferring possession and control of the fuel in Texas. The company initially paid franchise taxes on these sales, but later sought a refund, arguing that these transactions should not be attributed to Texas for franchise-tax purposes because the fuel was not used, sold, or consumed in Texas. The company contended that, under the relevant statute, sales should be sourced to the buyer’s ultimate destination or place of use, not merely the location where possession was transferred.After the Texas Comptroller denied the refund, the company exhausted administrative remedies and filed suit, also challenging the validity of regulations that sourced sales to Texas based on the point of delivery to the buyer. Both parties filed motions for summary judgment, focusing on whether the statutory phrase “delivered or shipped to a buyer in this state” refers to the place where the buyer takes delivery or to the location where the buyer uses or consumes the goods. The trial court ruled in favor of the Comptroller, upholding the regulations. On interlocutory appeal, the Court of Appeals for the Third District of Texas affirmed, finding the statute unambiguously sources sales based on where the buyer receives the property.The Supreme Court of Texas reviewed the case to resolve the statutory interpretation. The Court held that the statute sources receipts from sales of tangible personal property to Texas if the seller transfers possession and control to the buyer at a location in Texas, regardless of where the buyer ultimately uses or consumes the goods. The Court found that the Comptroller’s rules were consistent with this interpretation and thus valid. The judgment of the court of appeals was affirmed and the case remanded for further proceedings. View "NUSTAR ENERGY, L.P. v. HANCOCK" on Justia Law

A private, for-profit corporation, The GEO Group, Inc., which operates correctional facilities under contracts with federal and state government entities, was assessed a deficiency in sales and use taxes by the Texas Comptroller. GEO Group challenged the deficiency, arguing that the purchases made for operating the facilities were tax-exempt as they were made on behalf of government clients. The Comptroller denied the claim, and GEO Group paid the additional taxes and sued for a refund in district court.The trial court conducted a bench trial and ruled against GEO Group, finding that it failed to prove by clear and convincing evidence that it was an "agent" or "instrumentality" of the government, thus not qualifying for the tax exemption. The court of appeals affirmed the trial court's judgment, holding that GEO Group's relationship with its government clients was too attenuated to warrant a tax exemption and that the trial court did not err in applying a heightened standard of proof.The Supreme Court of Texas reviewed the case and concluded that the correct standard of proof for GEO Group to prove its entitlement to a tax exemption is by a preponderance of the evidence, not clear and convincing evidence. However, the court agreed with the lower courts that GEO Group is not an "agent" or "instrumentality" of the federal or state government under the relevant statutes and rules. Therefore, GEO Group is not entitled to a tax refund. The Supreme Court of Texas affirmed the judgment of the court of appeals. View "The GEO Group, Inc. v. Hegar" on Justia Law

Several homeowners sued an irrigation district, claiming that the district's refusal to remove over twenty-year-old charges from the tax rolls was an ultra vires act, violating the Tax Code's twenty-year limitations period. The district argued that the charges were Water Code assessments, not taxes, and thus not subject to the limitations period.The trial court granted the district officials' jurisdictional plea without permitting discovery, dismissing the homeowners' claims for lack of jurisdiction. The Court of Appeals for the Thirteenth District of Texas affirmed in part, concluding that the pleadings did not support an ultra vires claim under the Tax Code because the homeowners had not sought a refund from the tax assessor and the district had clarified that the charges were assessments under the Water Code.The Supreme Court of Texas reviewed the case and determined that the homeowners had sufficiently pleaded facts to demonstrate the trial court's jurisdiction over their ultra vires claim. The court held that the homeowners' pleadings, viewed liberally, alleged that the charges were taxes, had been delinquent for more than twenty years, and that no related litigation was pending at the time of the request to remove the charges. The court concluded that these allegations were sufficient to establish subject matter jurisdiction and did not implicate the district's governmental immunity.The Supreme Court of Texas reversed the Court of Appeals' judgment regarding the Tax Code ultra vires claim and remanded the case to the trial court for further proceedings consistent with its opinion. View "Herrera v. Mata" on Justia Law

In two consolidated property tax disputes, Oncor Electric Delivery Company NTU, LLC sought a multimillion-dollar reduction in the total values of certain electric transmission lines in the 2019 certified appraisal rolls for the Wilbarger County Appraisal District and Mills Central Appraisal District. Oncor’s predecessor had agreed to the lines’ value in each county to settle its protests of the Districts’ initial appraised values, but Oncor now contends that these agreements are void due to mutual mistake.Previously, Oncor filed unsuccessful motions for correction of the appraisal rolls with each County Appraisal Review Board (ARB) and then sued in district court in Wilbarger and Mills Counties. The trial and appellate courts below provided conflicting answers on whether questions regarding the effect of a Section 1.111(e) agreement—such as its validity and scope—are relevant to a trial court’s subject-matter jurisdiction over a suit for judicial review under Section 42.01 of the Tax Code.The Supreme Court of Texas held that the resolution of such questions does not implicate jurisdiction and remanded the cases to the trial courts for further proceedings. The court did not reach the merits of the parties’ disputes about whether Oncor has identified errors eligible for correction under Sections 25.25(c) or (d) of the Tax Code, whether any such errors fall within the scope of the parties’ Section 1.111(e) settlement agreements, and whether the doctrine of mutual mistake is an available defense to such agreements. View "MILLS CENTRAL APPRAISAL DISTRICT v. ONCOR ELECTRIC DELIVERY COMPANY NTU LLC" on Justia Law

The case revolves around a tax appraisal dispute involving Texas Disposal Systems Landfill, Inc. (the Landfill) and Travis Central Appraisal District (the District). The Landfill owns 344 acres of land in Travis County, which it operates as a landfill. In 2019, the District appraised the market value of the landfill at $21,714,939. The Landfill protested this amount under the Tax Code provision requiring equal and uniform taxation but did not claim that the District’s appraised value was higher than the market value of the property. The appraisal review board reduced the appraised value of the subject property by nearly ninety percent. The District appealed to the trial court, claiming that the board erred in concluding that the District’s appraised value was not equal and uniform when compared with similarly situated properties. The District also claimed that the board’s appraised value was lower than the subject property’s true market value.The trial court granted the Landfill’s plea to the jurisdiction, arguing that the challenge it made before the appraisal review board was an equal-and-uniform challenge, not one based on market value. Thus, the trial court lacked jurisdiction to consider market value. However, the court of appeals reversed this decision, holding that a trial court’s review of an appraisal review board’s decision is not confined to the grounds the taxpayer asserted before the board.The Supreme Court of Texas affirmed the court of appeals' judgment. The court concluded that the Tax Code limits judicial review to conducting a de novo trial of the taxpayer’s protest. In deciding the taxpayer’s protest in this case, the trial court is to determine the equal and uniform appraised value for the property subject to taxation. This limit, though mandatory, is not jurisdictional. The case was remanded to the trial court for further proceedings. View "TEXAS DISPOSAL SYSTEMS LANDFILL, INC. v. TRAVIS CENTRAL APPRAISAL DISTRICT" on Justia Law

The case revolves around J-W Power Company (J-W Power), a company that leases, sells, and services natural gas compressors used in oil and gas operations. The company maintains these compressors in many counties across Texas and often leases them to customers in neighboring counties. The case specifically involves the taxation of compressors maintained in Ector County that were leased to customers in Sterling and Irion Counties. J-W Power filed motions to correct the appraisal rolls under section 25.25(c) of the Tax Code, arguing that the appraisal rolls included “property that does not exist in the form or at the location described in the appraisal roll.” The Appraisal Review Boards (ARBs) in both counties denied the motions, leading to the current lawsuits.Previously, the district court granted summary judgment to the appraisal districts, arguing among other things that res judicata barred the section 25.25(c) motions because those motions involved the same subject matter as the prior Chapter 41 protests. The court of appeals affirmed this decision, holding that res judicata barred J-W Power’s section 25.25(c) motions, which raised “nearly verbatim” claims as compared to its prior Chapter 41 protests.However, the Supreme Court of Texas disagreed with the lower courts' decisions. The Supreme Court held that section 25.25(l) of the Tax Code preserved J-W Power’s right to file a section 25.25(c) motion notwithstanding its prior Chapter 41 protests. The court interpreted the phrase “regardless of whether” in section 25.25(l) to mean that a property owner can file a section 25.25(c) motion regardless of whether there was a prior Chapter 41 protest related to the value of the property. Therefore, the Supreme Court reversed the judgments of the court of appeals and remanded the cases for further proceedings. View "J-W POWER COMPANY v. IRION COUNTY APPRAISAL DISTRICT" on Justia Law

The case involves Yvondia Johnson, a 100% disabled U.S. Air Force veteran, who applied for a residence homestead tax exemption for her principal residence in Converse, Texas. The Bexar Appraisal District denied her application because her husband, also a 100% disabled U.S. military veteran from whom she is separated, claimed the same exemption for his principal residence in San Antonio, Texas.The trial court granted summary judgment for the appraisal district, arguing that Ms. Johnson was ineligible for the exemption because her husband claimed the same exemption on a different home they jointly owned. Ms. Johnson appealed, and the court of appeals reversed the decision, ruling in her favor.The Supreme Court of Texas affirmed the judgment of the court of appeals. The court held that the Tax Code bestows the exemption on each individual 100% disabled veteran who meets the express statutory requirements without regard to whether the veteran’s spouse also claims the exemption on a separate residence homestead. The court found that the plain text of Section 11.131(b) of the Tax Code unambiguously states that a 100% disabled veteran is entitled to a tax exemption for his or her residence homestead. The court concluded that Ms. Johnson satisfies the express, unambiguous requirements of Section 11.131(b) and therefore is entitled to the benefit of the tax exemption for 100% disabled veterans. View "BEXAR APPRAISAL DISTRICT v. JOHNSON" on Justia Law