Hallmark Marketing Co., LLC v. Hegar

The Texas Tax Code provides that “only the net gain” from the sale of investments should be included in a key component of the statutory franchise-tax formula. In implementing Texas’ statutory franchise-tax liability scheme, the state comptroller adopted a rule requiring businesses to include net gains or net losses. Hallmark Marketing Company filed a franchise-tax protest suit against the state comptroller seeking a refund of more than $200,000 in taxes it paid, arguing that the comptroller’s rule conflicts with the very statute it purports to enforce. The trial court and court of appeals ruled in favor of the comptroller. The Supreme Court reversed, holding that Tex. Tax Code 171.105(b) does not require Hallmark to include a net loss from the sale of investments. Remanded. View "Hallmark Marketing Co., LLC v. Hegar" on Justia Law