Texas Margin Tax
Texas Supreme Court to Hear Arguments Over the Constitutionality of the Texas Margin Tax
The Texas Lobby Group is staying on top of the RE NESTLE USA, INC. case, pending before the Texas Supreme Court. A full analysis of where things stand is available at their website.
The Texas Supreme Court agreed to hear oral arguments in a case challenging the Constitutionality of the Texas Margin Tax, which was enacted in 2006. Nestle USA, Inc. asked the Supreme Court to order the Comptroller to refund nearly $9 million in franchise taxes paid under protest by Nestle and its subsidiaries in 2012, to declare the franchise tax unconstitutional under both the Texas and U.S. Constitutions, and to provide injunctive relief prohibiting the Comptroller from enforcing, collecting, and assessing the franchise tax against Nestle in the future.
Nestle USA, Inc. alleges that the Texas Margin Tax violates both the United States and Texas Constitutions. It claims that various exceptions, deductions, and differing rates violate the Texas Constitution’s Equal and Uniform Taxation Clause, and the Equal Protection, Due Process, and Commerce Clauses of the U.S. Constitution because they are not uniform and have a disparate impact on the company.