Tag Archives: third court of appeals

Appeals Court: No COGS for Heavy Equipment Delivery/Pick-up Fees

The Texas Third Court of Appeals recently held in Hegar v. Sunstate Equipment Co., LLC, that a company that leased heavy equipment to contractors could not include its delivery and pick-up fees for the equipment in its cost of goods sold deduction for Texas franchise tax COGS deduction purposes.  In doing so, the Third Court […]


Business Buyer Owes Tax Not Assessed Until After Purchase, Appeals Court Says

The Texas Third Court of Appeals held today in Agri-Plex Heating and Cooling, LLC v. Hegar that the purchaser of a business may be liable for Texas sales and use tax assessed against the business for the time before the purchase, even if the Texas Comptroller did not audit the business and assess the tax […]


Movie Theaters Still Qualify for COGS, Appeals Court Says

The Third Court of Appeals issued a new opinion today in American Multi-Cinema, Inc. v. Hegar, over a year and a half after the Texas Comptroller filed a motion for rehearing.  The new opinion leaves in places the Third Court of Appeals’ prior ruling that a movie theater company may include costs of exhibiting films […]


U.S. Supreme Court Denies Three-Factor Apportionment Review

The United States Supreme Court denied review of Gillette Co. v. California Franchise Tax Board, the California Supreme Court case holding that taxpayers may not use the Multistate Tax Compact’s three-factor apportionment method to apportion their income under the California Business Income Tax.  As is customary, the Court didn’t explain its reasons for denying review.  […]


No Resale Exemption for Health Club Equipment, Appeals Court Finds

The Texas Third Court of Appeals issued its opinion today in Fitness International, LLC v. Hegar.  It held that certain equipment, such as cardio machines and weight racks, that a health club purchased for its customers’ use, was not exempt from Texas sales and use tax under the sale for resale exemption.  The court based […]


Court of Appeals Rules No Three-Factor Apportionment, Texas Franchise Tax Is Not an Income Tax

The Texas Third Court of Appeals issued its opinion yesterday in Graphic Packaging Corp. v. Hegar, No. 03-14-00197-CV.   It ruled that taxpayers may not choose to use the Multistate Tax Compact’s three-factor apportionment method to apportion their taxable margin under the Texas franchise tax.  In doing so, the Third Court of Appeals held that the […]


Appeals Court Finds New Tax on Small Tobacco Manufacturers Unconstitutional

The Third Court of Appeals recently held in Combs v. Texas Small Tobacco Coalition that a new tax on small tobacco manufacturers violates the Equal and Uniform Taxation Clause of the Texas Constitution.  In doing so, the Third Court upheld a trial court decision from late last year invalidating the tax.  The opinion highlights the […]


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 […]


Texas Supreme Court Won’t Weigh in on Prepayment Requirement for Court Access

Today, the Texas Supreme Court denied the Texas Comptroller’s Petition for Review in the Richmont Aviation case.  As a result, the Third Court of Appeals’ decision in the taxpayer’s favor becomes final, but the Texas Supreme Court has taken no position on the Third Court of Appeals’ holding in Richmont Aviation, leaving some uncertainty in […]


Court of Appeals Denies Texas Sales Tax Exemption for Oil and Gas Equipment

The Texas Third Court of Appeals just issued its opinion in Southwest Royalties, Inc. v. Combs, No. 03-12-00511-CV.  The opinion affirms a district court opinion denying oil and gas operators the Texas sales tax manufacturing exemption on their purchases of certain above-ground and downhole production equipment.  The opinion also provides some useful discussion of the circumstances […]


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