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 under which the Texas Comptroller’s statutory interpretations should be accorded deference.  We will soon post a longer blog entry discussing this opinion and its implications for Texas taxpayers in more detail in our Texas tax law blog.


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