Glenn Hegar, Comptroller of Public Accounts of the State of Texas And Ken Paxton, Attorney General of the State of Texas v. Statewide Materials Transport, Ltd.
03-15-00186-CV
| Tex. App. | May 27, 2015Background
- Statewide Materials Transport, Ltd. sued the Texas Comptroller and Attorney General under Tex. Tax Code §112.052 to recover franchise taxes paid under protest for 2012.
- Statewide argued flow-through funds should be excluded from revenue for tax purposes and paid $17,976 with an extension request, then $144,264 under protest when filing the extended report.
- Before the protest payment, the Comptroller had not assessed Statewide’s 2012 franchise tax liability.
- Statewide’s protest was based on its own calculation of the amount owed, not on a concrete state demand.
- The trial court denied the defense motion to dismiss; the appellate court framed the issue as whether self-predicted protest payments can satisfy §112.051(a).
- The court held the protest-payment prerequisite is a jurisdictional requirement that must be satisfied by a concrete state demand, not self-assessment, and dismissed for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether protest payment must be the amount claimed by the state | Statewide: self-assessment may satisfy the amount claimed. | State Defendants: needs a concrete state demand; self-assessment insufficient. | Protest payment must be the amount claimed by the state; self-assessment insufficient. |
| Whether Nestle II controls the question presented | Statewide: Nestle II supports self-assessment sufficiency. | Nestle II did not address this specific issue; it concerned original jurisdiction. | Nestle II does not govern; it does not decide this protest-payment issue. |
| Effect of protest-payment interpretation on §112.052(b) deadlines | Statewide contends extensions would be unavailable if self-assessment is invalid. | Extensions remain meaningful under §112.052(b) when a state demand occurs. | §112.052(b) remains meaningful and can apply with extension mechanisms. |
| Role of Section 112.051(a) within Chapter 112 remedies | Statewide argues protest is a standalone entry into court. | Chapter 112 provides three exclusive avenues; protest-suit is not a fourth route without a concrete demand. | Chapter 112’s protest-suit is exclusive and requires a concrete state demand. |
Key Cases Cited
- In re Nestle USA, Inc., 359 S.W.3d 207 (Tex. 2012) (Nestle I: immunity and prerequisites; did not address self-assessment sufficiency for §112.051(a))
- In re Nestle USA, Inc., 387 S.W.3d 610 (Tex. 2012) (Nestle II: jurisdiction on original-constitutional challenge; not controlling on protest-payment sufficiency)
- Berry v. Tex. Democratic Party, 449 S.W.3d 633 (Tex. App.—Austin 2014) (strict construction of waivers of sovereign immunity)
- Prairie View A & M Univ. v. Chatha, 381 S.W.3d 500 (Tex. 2012) (strict construction of immunity waivers; tax contexts)
- Dallas Cnty. Community Coll. Dist. v. Bolton, 185 S.W.3d 868 (Tex. 2005) (tax payments and orderly administration of taxation)