Last year, the Texas Comptroller proposed a regulation that affects how local sales tax is allocated for online sales, to become effective October 1, 2021. While Texas generally uses origin-based sourcing, under the new rule, online sales will generally be sourced to the destination of the sale. Local governments protested these amendments, arguing that they would disrupt the sales tax revenues generated by businesses. Now, the City of Round Rock, Texas has filed a suit against the Texas Comptroller seeking to enjoin the regulation. In the petition, Round Rock argues that the regulation’s definition of where a sale is consummated and “place of business” conflicts with Texas statutes, and would significantly decrease its annual sales tax revenue. Round Rock points to one large computer and software business, with which it has an incentive agreement, whose substantial sales tax revenues would no longer be sourced to Round Rock under the new regulation. The petition further alleges that the changes from the regulation would unconstitutionally impair Round Rock’s existing incentive contracts.