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The Texas Court of Appeals held that crude oil stored in tank farms in San Patricio County solely for export to foreign buyers was constitutionally immune from county ad valorem taxation under the Import-Export Clause of the U.S. Constitution. The court concluded the oil constituted property in the stream of export overseas and therefore could…

The Supreme Court of Texas ruled that a corporation that owns and operates correctional facilities was not exempt from sales and use taxes as an unincorporated instrumentality of the United States or Texas. The corporation runs private prisons and enters into contracts with federal and state government agencies to house inmates. The Comptroller assessed the…

On Friday, December 6, 2024, the Texas Comptroller held a public hearing in Austin, TX regarding the proposed changes to the data processing regulation (section 3.330) published in the Texas Register on September 13, 2024. Several parties submitted written comments in response to the proposed regulation, including the Texas Taxpayers and Research Association (TTARA)…

The Texas Comptroller of Public Accounts held its annual briefing in Austin on September 17 and provided taxpayers with updates regarding audit staffing shortages, pending litigation, recent guidance and related topics.

Solutions for a Texas-Sized Audit and Hearings Backlog

Audit Assistant Director Rosie Julius said that the agency continues to struggle with staffing issues due…

The Texas Court of Appeals for the Third District upheld the Comptroller of Public Accounts’ Franchise Tax apportionment rule as facially valid, including the provisions apportioning receipts to Texas where the seller ships or delivers property in Texas—regardless of whether the buyer is ultimately located in the state. 

The taxpayer, a company that transports and…

On February 6, 2023, the Texas Comptroller of Public Accounts released a memorandum summarizing the internal-use software regulations related to the state’s franchise tax research and development credit and the sales tax R&D exemption. The comptroller significantly revised these regulations in 2021 and then reversed the revisions in 2022, causing confusion among members of the…

The Texas Comptroller of Public Accounts amended its franchise tax apportionment rule, as published in proposed form in the March 10 issue of the Texas Register. The rule, which is now final, discards the “receipt-producing, end-product act” test in light of Eversheds Sutherland’s litigation in Sirius XM Radio, Inc. v. Hegar. Taxpayers should consider…