Taxpayers’ first appellate margin tax win becomes final

The Third Court of Appeals’ decision in Combs v. Newpark Resources, Inc. became final today, marking Texas taxpayers’ first appellate margin tax win.  The Texas Comptroller did not file a timely appeal with the Texas Supreme Court, so the Third Court of Appeals issued its mandate today.  The opinion, originally handed down this past December, rejects the Texas Comptroller’s narrow interpretation of the Texas franchise tax’s cost of goods sold deduction in favor of the taxpayer’s broader interpretation of the taxing statute.  Our earlier post on the Newpark case describes its holdings in more detail (Note that The Seay Law Firm does not represent Newpark Resources, Inc. and had no involvement in this case.).

We still don’t know whether the Texas Comptroller will appeal the Third Court of Appeals’ other Texas franchise tax decision in the taxpayer’s favor, Titan Transportation, L.P. v. Combs.  The Texas Comptroller has until Monday, April 28, 2014 to file a timely appeal of the Titan decision with the Texas Supreme Court.  That opinion, issued last month, rejects the Texas Comptroller’s narrow, restrictive interpretation of the revenue exclusion for certain payments to those who perform work on real property in favor of the taxpayer’s more expansive view.  Our earlier post on the Titan case describes that opinion in more detail (Note that The Seay Law Firm does not represent Titan Transportation, L.P. and had no involvement in this case.).


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