Tracfone Wireless, Inc. and Virgin Mobile USA, L.P. v. Commission on State Emergency Communications
397 S.W.3d 173
| Tex. | 2013Background
- Texas Supreme Court case addressing whether the pre-2010 e911 fee statute (771.0711) applied to prepaid wireless services; a 2010 amendment created a separate prepaid fee (771.0712) 2% of purchase price; question is whether the old statute taxed prepaid prior to 2010.
- Prepaid providers (TracFone Wireless, Virgin Mobile) paid e911 fees under 771.0711 for some years before 2010; after discovering over-remittance, they sought refunds and stopped further payments.
- CSEC challenged whether 771.0711 ever applied to prepaid wireless and whether 771.0712 creates or preempts double taxation; an ALJ decision favored prepaid providers, and the court of appeals reversed.
- Legislature enacted 771.0712 in 2009 (effective 2010) to tax prepaid separately; trial court and appellate decisions split, leading to this review by the Texas Supreme Court.
- Court reversed the court of appeals, holding that the pre-2010 statute did not apply to prepaid wireless and that prepaid-specific 771.0712 stands as a separate, non-conflicting tax mechanism.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does 771.0711 unambiguously apply to prepaid wireless? | Prepaid providers contend 771.0711 applies to prepaid. | CSEC argues 771.0711 broadly covers wireless connections, including prepaid. | No; 771.0711 does not apply to prepaid in its pre-2010 form. |
| If 771.0711 is ambiguous, does the taxpayer-favorable presumption control and prohibit double taxation? | Prepaid providers rely on the pro-taxpayer presumption for ambiguous taxes. | CSEC argues agency interpretation should govern when ambiguous. | Even if ambiguous, the result favors lack of application to prepaid; double taxation is impermissible. |
Key Cases Cited
- Napier v. Hodges, 31 Tex. 287 (Tex. 1868) (double taxation and uniformity principles informed by historical cases)
- Daugherty v. Thompson, 9 S.W. 99 (Tex. 1888) (early considerations of taxation mechanics and uniformity)
- Big Lake Oil Co. v. Reagan Cnty., 217 S.W.2d 171 (Tex. Civ. App.—El Paso 1948) (discussed in double taxation context and uniformity)
- City of Newport, 193 S.W. 5 (Tex. 1917) (quoted on double taxation and uniformity rationale)
- Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887 (Tex. 2000) (specific-over-general canon and statutory interpretation)