Justia Texas Supreme Court Opinion Summaries

A school district (District) obtained an in rem delinquent property tax judgment against an oil and gas lease that Respondent owned and operated. Respondent did not appeal, and the District foreclosed its judgment lien on the leasehold, taking ownership. The Railroad Commission ordered Respondent to plug a well on the lease. Respondent did not comply, and the Commission plugged the well and brought an enforcement action in court to recover the costs of the operation and the penalty. Respondent and the Commission settled. Respondent then sued the District, alleging in part that the District's actions had resulted in a taking of his property requiring compensation. The trial court dismissed Respondent's action for want of jurisdiction, but the court of appeals reversed and remanded with respect to the takings claim. The Supreme Court reversed and dismissed the case, holding that the trial court correctly dismissed Respondent's case, as Respondent did not assert on appeal that the District took his property without compensation. View "W. Hardin County Consol. Indep. Sch. Dist. v. Poole" on Justia Law

At issue in this case was whether taxpayers who were sued for nonpayment of property taxes lost their entitlement to contest liability based on non-ownership when the taxing authorities non-suited after the taxpayers paid the disputed taxes under protest. The taxing authorities filed a plea to the jurisdiction, asserting that the district court lacked jurisdiction because the taxpayers failed to exhaust administrative remedies as required by the Tax Code. The district court denied the plea. The court of appeals reversed and granted the plea. The Supreme Court reversed, holding that the taxpayers did not lose their entitlement to contest tax liability on the basis of non-ownership when the taxing units non-suited and the taxpayers were realigned as plaintiffs. View "Morris v. Houston Indep. Sch. Dist." on Justia Law

Since first imposing a franchise tax in 1893, the Legislature restructured it several times, drawing various distinctions among taxpayers with adjustments, deductions, and exemptions that became elaborate. Petitioner in this original proceeding contended that the franchise tax bore no reasonable relationship to its object, the value of the privilege of doing business in Texas, and therefore it violated the Texas Constitution's mandate that "taxation shall be equal and uniform," the Fourteenth Amendment's equal protection and due process guarantees, and the U.S. Constitution's Commerce Clause. The Supreme Court denied the petition, holding (1) Petitioner failed to establish that the franchise tax violates the Equal and Uniform Clause; (2) the failure of Petitioner's challenge based on the Equal and Uniform Clause foreclosed its equal protection challenge; (3) the franchise tax does not violate due process; and (4) the manufacturing rate does not discriminate against interstate commerce and is fairly related to the services provided by Texas. View "In re Nestle USA, Inc." on Justia Law

Petitioners and its affiliates, manufacturers and distributors of food and beverages in the United States, sought a declaration that the Texas franchise tax was unconstitutional, Tex. Tax Code 171.0001-.501, an injunction prohibiting its collection, and mandamus relief compelling the Comptroller to refund the taxes they paid from 2009 through 2011. Petitioners did not pay their taxes under protest or request a refund from the Comptroller, statutory requisites to taxpayers suits in the district court but not, relators contended, for suit in this court. The court disagreed and held that the statutory requisites were conditions on the legislative waiver of the State's immunity from suit. Accordingly, the court dismissed the case for want of jurisdiction. View "In re Nestle USA, Inc., Switchplace, LLC, and NSBMA, LP, Relators" on Justia Law

In this original proceeding Allcat, a limited partnership, and one of its limited partners sought an order directing the Comptroller to refund franchise taxes Allcat paid that were attributable to partnership income allocated, but not distributed, to its natural-person partners. Allcat claimed it was entitled to a refund for two reasons. First, the tax facially violated Article VIII, Section 24 of the Texas Constitution because it was a tax on the net incomes of its natural-person partners that was not approved in a statewide referendum. Second, as applied by the Comptroller, to Allcat and its partners, the franchise tax violated Article VIII, Section 1(a) of the Constitution, which required taxation to be equal and uniform. The court held that: (1) the tax was not a tax imposed on the net incomes of the individual partners, thus it did not facially violated Article VIII, Section 24; and (2) the court did not have jurisdiction to consider the equal and uniform challenge. View "In re Allcat Claims Service, L.P. and John Weakly" on Justia Law

This appeal arose from a franchise tax dispute involving the apportionment of receipts from the licensing of geophysical and seismic data to customers in Texas. Petitioner, a taxpayer, complained that respondent mischaracterized these receipts as Texas business and thereby had erroneously increased its franchise tax burden. At issue was whether these receipts should be categorized as receipts from the use of a license or as receipts from the sale of an intangible asset. The court held that the court of appeals erred in upholding respondent's franchise tax assessment because petitioner's receipts from licensing its seismic data were not receipts from the use of a license in the state within Tex. Tax Code 171.103(a)(4)'s meaning. Receipts from this intangible asset was not allocated according to its place of use under subsection (4) but rather, were included under subsection (6)'s catch-all provision as a limited sale of an intangible and allocated under the location of the payor rule. Accordingly, the court reversed the judgment and remanded for further proceedings.

Respondents, owners of a vendors lien on each of four tracts of land, sued to have their liens declared superior to petitioner's liens. At issue was whether petitioner's liens were not unenforceable pursuant to section 32.06 of the Texas Tax Code's requirements for transfer. The court held that petitioner's tax liens were not unenforceable when verified copies were recorded in lieu of originals; when the procedure wherein the tax collector made the required certification before a notary, sealed with a notarial seal, in lieu of a seal of his own, complied with section 32.06(d); and when the tax collector's record-keeping and receipts were irrelevant to the enforceability of petitioner's liens.