Tag Archives: oil and gas

Southwest Royalties: No New Manufacturing Exemption for Oil & Gas, Texas Supreme Court Says

Today, the Texas Supreme Court released its long-awaited opinion in Southwest Royalties, Inc. v. Hegar.  It held that oil and gas above-ground and downhole production equipment doesn’t qualify for the manufacturing exemption from Texas sales and use tax, affirming the ruling of both the Third Court of Appeals and the trial court.  This case has […]

Texas Legislative Recap for State and Local Taxes 2015

While the 2015 Texas Legislature gave taxpayers a significant franchise tax (margin tax) rate cut and repealed some smaller taxes (some of which had not been collected in years), it otherwise left much of the Texas tax code otherwise unchanged.  In this Texas legislative recap, we’ll tell you about the changes the Texas Legislature made […]

Third Court of Appeals Defers to Comptroller on Manufacturing Exemption for Oil & Gas

As we reported earlier, the Third Court of Appeals ruled in Southwest Royalties, Inc. v. Combs that oil and gas above-ground and downhole production equipment doesn’t qualify for the Texas sales tax manufacturing exemption.  This case has drawn a fair amount of attention due to the large potential financial impact on the State of Texas […]

Major Texas Franchise Tax Policy Change: Comptroller Gives Up on the “Physical Change” Rule for Subcontractor Exclusion and COGS Deduction

The Texas Comptroller recently published a very significant policy letter to the Comptroller’s online database. The letter announces a significant change in Texas franchise tax policy that could affect entities even only somewhat involved with the design, construction, remodeling, repair, or industrial maintenance of real property. The Comptroller’s previous policy was that only entities that […]

Court of Appeals Hears Argument Regarding Texas Sales Tax Exemption for Oil and Gas Equipment

The Texas Third Court of Appeals heard oral argument today in Southwest Royalties, Inc. v. Combs, No. 03-12-00511-CV.  The case addresses whether oil and gas operators may claim the Texas sales and use tax manufacturing exemption on their purchases of certain above-ground and downhole production equipment.  An ultimate win for the taxpayer here could mean […]

A Guide to the Legislature’s Changes to Texas Sales and Use Tax Law

The Texas Legislature passed several changes to the Texas sales and use tax laws. None of these Texas sales tax law changes are particularly sweeping – they only impact particular industries.  This article summarizes the Texas sales tax law changes that the Legislature passed. These will all become law provided that Governor Rick Perry doesn’t veto them.

Band-Aids on a Critical Patient: Changes to the Texas Franchise Tax in 2013

Last week, the House passed HB 500, a major revision to the Texas franchise tax. This is the first indication of what changes may be in store for the Texas franchise tax, or margin tax, in 2013.  Below is a fairly complete list of all of the changes that HB 500 includes. Of course, the […]


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