Texas Tax Blog | The Seay Law Firm

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 Texas sales and use tax refunds for many other Texas oil and gas operators.

The court below denied the taxpayer’s Texas sales and use tax refund claim, and the taxpayer appealed. However, the lower court judge verbally ruled in the taxpayer’s favor after trial, only to reverse his decision in his later written judgment.

In this article, I’ll briefly explain the legal basis for the taxpayer’s Texas sales and use tax refund claim, then discuss the issues of particular interest to the Third Court of Appeals today.

By Amanda Traphagan | September 25, 2013

More on Texas Mixed Beverage Tax Changes

The Texas Tribune posted an article today called “Mixed Views on Increased Beverage Tax” by Alexa Ura. The article discusses the recent changes to Texas’s mixed beverage taxing scheme that I blogged about last month. I’m quoted in the article briefly explaining why some oppose this change. I encourage you to read my blog post on the mixed beverage tax changes for a more complete and nuanced analysis of why some oppose this change to the mixed beverage tax. There are also good reasons to support the change, which I also discuss in my earlier post.

By Amanda Traphagan | July 30, 2013

Texas Comptroller Hearing Decision Highlights Importance of Terminating Business Entities

A new Texas Comptroller hearing decision spotlights the importance of terminating business entities after they conclude their business. Doing so helps limit the entity’s exposure to potential tax assessments. This is because it, in many cases, may effective reduce the amount of time the Comptroller has to make an assessment against the entity. I’ll discuss why below.

By Amanda Traphagan | July 12, 2013

Texas Legislature Considers Tax Increases in Second Special Session

Members of the Texas Legislature have filed two tax bills for consideration in the current second special legislative session. Both are proposals for how to increase transportation funding in response to Governor Perry’s charge to the Legislature to consider “legislation relating to the funding of transportation infrastructure projects.” Exactly how much consideration the Legislature will give these proposals remains to be seen, given the other prominent and controversial bills filed this session. Nevertheless, I’ve summarized the tax bills currently on file for the benefit of those who must forecast changes to the Texas tax laws.

By Amanda Traphagan | July 8, 2013

What DOMA’s Demise Means for the Texas Franchise Tax

The U.S. Supreme Court’s recent decision in U.S. v. Windsor raises many questions for the world of tax. The decision invalidated the portion of the Defense of Marriage Act (DOMA) that defines “marriage” only as a union between a man and a woman for federal purposes. However, the decision did not invalidate the portion of the Defense of Marriage Act that allows states to refuse to recognize same-sex marriages performed in other states. This means that federal law now recognizes same-sex marriage in those states where it is legal. However, it remains unclear what the decision means for married same-sex couples residing in states like Texas that don’t recognize same-sex marriage – for example, if a couple married in New York and then moved to Texas.

This uncertainty has implications for both federal and state tax law alike. Other bloggers have already discussed the federal tax implications of this uncertainly (for example “DOMA, Taxes, and Where You Live” from Don’t Mess with Taxes). But the U.S. Supreme Court’s decision may also create an interesting issue under the Texas franchise tax. In short, the decision makes it unclear when businesses owned by a married same-sex couple must file as a combined group.

By Amanda Traphagan | July 2, 2013

Governor Perry Signs Big Change to Texas’ Mixed Beverage Tax

The Texas Legislature passed, and Governor Perry signed, a big change to Texas’ mixed beverage gross receipts tax. In short, the state just passed a tax increase on many alcoholic beverages. Further, a portion of the tax will be imposed on the consumer instead of the seller. Below, I’ll explain how the mixed beverage tax currently operates, how it will soon change, and what this means for customers and businesses alike.

By Amanda Traphagan | June 20, 2013

Texas Governor Signs all Significant Texas Franchise Tax and Texas Sales Tax Bills

Yesterday, the Texas franchise tax and the Texas sales and use tax became a bit more complicated. Governor Rick Perry just signed into law all significant Texas franchise tax and Texas sales tax bills the Legislature passed in 2013. Each bill adds a few more twists to an already-tangled Texas tax code.

Amanda summarized the 2013 changes to the Texas sales tax here. I posted an overview of the 2013 changes to the Texas franchise tax here. Most of the changes go into effect on January 1, 2014, but some provisions are effective before then (usually September 1, 2013).

By Michael Seay | June 15, 2013

Texas Supreme Court Refuses to Defer to Texas Comptroller’s Interpretation of Sale-for-Resale Exemption

Today, the Texas Supreme Court continued its trend of giving little deference to the Texas Comptroller in Combs v. Health Care Services Corporation. There, the Texas Supreme Court held that Health Care Services Corporation, a company that administers federal health insurance programs, was entitled to the sale-for-resale exemption from Texas sales and use taxes on items it used to perform non-taxable services to administer those health insurance programs on behalf on the federal government. These items included tangible personal property, such as printers and office supplies, and taxable services, such as printer repair services and landscape maintenance. The federal government reimbursed Health Care Services Corporation for its purchases of these items.

By Amanda Traphagan | June 7, 2013

Texas Tax Appellate Court Decisions: The Year in Review

This post takes a quick look at the decisions regarding Texas sales and use tax and Texas franchise tax that the Texas Supreme Court and Texas Courts of Appeals have handed down in the past year. While this blog has already discussed some of these, now is a good time to revisit them in light of the recent changes the Texas Legislature has made to the Texas tax laws.

By Amanda Traphagan | June 5, 2013

Major Change to Texas Franchise Tax Cost of Goods Sold Rule Finalized

The Texas Comptroller just adopted a major revision to the Texas franchise tax cost of goods sold rule. The final rule the Texas Comptroller adopted is basically the same as the proposed cost of goods sold rule Michael described in his earlier post. I’ll describe the ways the Texas Comptroller’s final cost of goods sold rule differs from the proposed version below. The changes are all fairly minor and technical in nature. The rule still significantly expands the costs taxpayers may include in their Texas franchise tax cost of goods sold deduction, particularly for taxpayers in the construction industry.

By Amanda Traphagan | June 4, 2013

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

More on Texas Mixed Beverage Tax Changes

Texas Comptroller Hearing Decision Highlights Importance of Terminating Business Entities

Texas Legislature Considers Tax Increases in Second Special Session

What DOMA’s Demise Means for the Texas Franchise Tax

Governor Perry Signs Big Change to Texas’ Mixed Beverage Tax

Texas Governor Signs all Significant Texas Franchise Tax and Texas Sales Tax Bills

Texas Supreme Court Refuses to Defer to Texas Comptroller’s Interpretation of Sale-for-Resale Exemption

Texas Tax Appellate Court Decisions: The Year in Review

Major Change to Texas Franchise Tax Cost of Goods Sold Rule Finalized

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