Alert: Texas Supreme Court dismisses constitutional challenge to franchise tax

myStateTaxOffice

The Texas Supreme Court dismissed today In re Nestle USA, Inc., a case seeking declaration that the Texas franchise tax is unconstitutional. The taxpayers had not paid their taxes under protest or requested a refund, statutory prerequisites to taxpayer suits in the district court. The taxpayers claimed that the statutory requirements applied only to suits brought in the district court and not to those brought as original proceedings to the Supreme Court. The Court disagreed, stating the statutory prerequisites are "conditions on the legislative waiver of the State's immunity from suit" and, accordingly, dismissed the case for want of jurisdiction. In Re Nestle USA, Inc., Switchplate, LLC, and NSBMA, LP, Relators (Feb. 10, 2012)



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