On September 24, 2020, the Texas Court of Appeals upheld the Texas insurance premium tax on insurance policies for bales of cotton temporarily stored at Texas warehouses. The court rejected the taxpayer’s arguments that: (1) the tax violated the Commerce Clause and the Import-Export Clause of the United States Constitution; and (2) the insurance at
Something to Keep an Eye On: Texas Comptroller Says Web-Based Services for Eye Doctors Is Taxable Data Processing
The Texas Comptroller of Public Accounts issued a private letter ruling concluding that several services provided to optometrists and ophthalmologists were subject to sales tax as data processing. Specifically, the Comptroller determined that the taxpayer’s web-based software system, which doctors use to manage patient relationships, schedule appointments, refill prescriptions, and communicate about treatment, is a
Don’t Throw Away Your Shot! Texas Court of Appeals Holds All Alternative Arguments Must Be Clearly Stated In Initial Refund Claim
The Texas Court of Appeals held that the trial court did not have jurisdiction over a taxpayer’s sales and use tax refund claim because the taxpayer failed to properly state the grounds for the refund claim. The Texas Tax Code requires that a refund claim: (1) be written, (2) “state fully and in detail each
Oregon Decision and Texas Letter Ruling
In this episode we discuss two recent developments, including an Oregon decision concerning sales tax on vehicles (EAN Holdings, LLC v Oregon Department of Revenue) and a Texas letter ruling dealing with software as a service and data processing (Texas Private Letter Ruling No. PLR 20180724152951).
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Recent CA, TX and UT Tax Rulings on Income Tax, Unclaimed Property and Electricity Taxes
In this episode we discuss three recent developments, including an electricity tax matter in California (City of Arcata v. Pacific Gas & Electric Co.) a Texas unclaimed property matter (CKD Homes Direct, Ltd v. Comptroller) and a Utah income tax matter.
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Texas Delays Effective Date of Tax Sourcing Rule
The Texas Comptroller has delayed until October 2021 the effective date of a new regulation that affects where local sales tax is allocated. The rule, which amends 34 TAC § 3.334, is meant to reduce the portion of sales tax revenue received by localities that host online retailer’s order-processing centers. The current rule generally provides
Cleared for Takeoff: Texas Supreme Court finds Jet Sales Properly Sourced out of State
The Texas Supreme Court held that a defense contractor was entitled to a refund of franchise tax because it had incorrectly sourced certain sales of military aircraft made to foreign governments to Texas on its originally-filed returns for the 2005 through 2007 tax years. The contractor produced military aircraft in Texas, which it sold to
Legal Alert: Texas Trifecta – Texas Supreme Court issues three decisions on cost of goods sold deductions
On Friday, April 3 the Texas Supreme Court issued three decisions addressing the availability and scope of the cost of goods sold, or “COGS,” deduction.
Hegar v. American Multi-Cinema Inc.
The first, and most anticipated, decision is Hegar v. American Multi-Cinema, Inc.1 This case concerned whether AMC, the movie-theater chain, was eligible to deduct
Virtual Pets and the Reality of Taxes – Texas Comptroller Affirms Sales Tax Assessment on Online Gaming Company
The Texas Comptroller adopted a proposed decision issued by an Administrative Law Judge (ALJ) finding that a company owed sales tax on its sales of online gaming services to Texas residents. The company, who had at least one employee in Texas, developed and maintained online interactive social gaming experiences for its registered users, including those
Why a taxpayer’s carbon reactivation process is ineligible for Texas’ manufacturing sales tax exemption
A taxpayer’s spent carbon reactivation process did not qualify as “manufacturing” for the purposes of Texas’ manufacturing sales tax exemption, according to recently released guidance from the Texas Comptroller of Public Accounts. In a private letter ruling, the Comptroller holds that a taxpayer who operates a carbon reactivation plant is ineligible for the exemption because