Petition for Writ of Mandamus - Filed - Supreme Court of Texas

WINSTEAD
Austin Dallas Fort Worth Houston San Antonio The Woodlands Washington, D.C.
Jennifer Patterson Rabb
512.370.2875 DIRECT
jrabb@winstead.com
May 11, 2012
401 Congress Avenue
Suite 2100
Austin, Texas 78701
512.370.2800 OFFICE
512.370.2850 Fax
winstead.corn
Via Facsimile (512) 463-3353
Texas Comptroller of Public Accounts
Attention: Ms. Leonore Monroy
111 East 17th Street
Austin, Texas 78701
Re:
Nestle USA, Inc. & Affiliates
Taxpayer Identification No. 19515722098
Protest Payment of 2012 Franchise Tax
Dear Sir or Madam:
Pursuant to Section 112.051, Texas Tax Code, Nestle USA, Inc. and the affiliated
entities listed in Exhibit A (collectively, "Nestle"), hereby submit this written statement of protest
with respect to $8,682,998.99 (the "Protest Payment") of the following electronic payment made
by Nestle USA, Inc. today, May 11, 2012:
Settlement Date: May 11, 2012
Texas Taxpayer ID: 19515722098
Tax Type: Franchise Tax
Amount: $8,682,998.99
The Protest Payment is payment of Texas franchise taxes assessed by the Comptroller
for report year 2012. Nestle merits recovery of the Protest Payment because the Texas
franchise tax violates both the Texas and United States Constitutions, as explained below,
1. The Margin Tax Violates the Equal and Uniform Clause of the Texas Constitution.
The Margin Tax violates the Equal and Uniform Clause of the Texas Constitution
because it taxes taxpayers disparately based on classifications that have no reasonable
relationship to the value of the privilege of doing business in Texas.
A. The Equal and Uniform Clause requires classifications among taxpayers
within a franchise tax to be reasonably related to the value being taxed.
Article VIII, Section 1(a) of the Texas Constitution provides that "taxation shall be equal
and uniform." Generally, the Equal and Uniform Clause requires that any classifications among
11 I
Dist., 922 S.W.2d 931, 936 (Tex. 1996); Hurt v. Cooper, 110 S.W.2d 896, 901 (Tex. 1937).
With respect to an occupation tax, Texas courts have held that this standard merely requires
that a classification be rationally related to a legitimate state purpose. Hurt, 110 S.W.2d at 900-
01; Tex. Co. v. Stephens, 103 S.W. 481, 484-85 (Tex. 1907). However, the standard of
reasonableness for a franchise tax is different.
AUSTIN 1 1661403 vl 52275-1
WINSTEAD PC • ATTORNEYS