Petition for Writ of Mandamus - Filed - Supreme Court of Texas
Petition for Writ of Mandamus - Filed - Supreme Court of Texas
Petition for Writ of Mandamus - Filed - Supreme Court of Texas
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activities in <strong>Texas</strong>, it is subject to the higher 1.0% franchise tax rate applicable to <strong>Texas</strong><br />
manufacturers.<br />
7. On May 11, 2012, Plaintiff electronically submitted to the Comptroller, on behalf<br />
<strong>of</strong> the Nestle Combined Group, the Protest Payment as complete payment <strong>of</strong> franchise tax <strong>for</strong><br />
report year 2012. On the same day, Plaintiff hand-delivered to the Comptroller a Protest Letter<br />
stating fully and in detail its reasons <strong>for</strong> recovering the Protest Payment.<br />
8. Plaintiff and each member <strong>of</strong> the Nestle Combined Group is jointly and severally<br />
liable <strong>for</strong> the franchise tax <strong>of</strong> the entire Nestle Combined Group. TEX, TAX. CODE ANN.<br />
§ 171.1014(i).<br />
V. CAUSE OF ACTION<br />
9. Plaintiff seeks recovery <strong>of</strong> the Protest Payment pursuant to <strong>Texas</strong> Tax Code<br />
Section 117.052 because the <strong>Texas</strong> franchise tax violates both the <strong>Texas</strong> Constitution and the<br />
United States Constitution.<br />
A. The Margin Tax Violates the Equal and Uni<strong>for</strong>m Clause <strong>of</strong> the <strong>Texas</strong> Constitution.<br />
10, The Margin Tax violates the Equal and Uni<strong>for</strong>m Clause <strong>of</strong> the <strong>Texas</strong> Constitution<br />
because it taxes taxpayers disparately based on classifications that have no reasonable<br />
relationship to the value <strong>of</strong> the privilege <strong>of</strong> doing business in <strong>Texas</strong>. The Equal and Uni<strong>for</strong>m<br />
Clause requires classifications among taxpayers within a franchise tax to be reasonably related to<br />
the value being taxed.<br />
11. Article VIII, Section 1(a) <strong>of</strong> the <strong>Texas</strong> Constitution provides that "taxation shall<br />
be equal and uni<strong>for</strong>m." Generally, the Equal and Uni<strong>for</strong>m Clause requires that any<br />
classifications among taxpayers must not be unreasonable, arbitrary, or capricious. Enron Corp,<br />
v, Spring Indep, Sch. Dist., 922 S.W,2d 931, 936 (Tex. 1996); Hurt v. Cooper, 110 S.W.2d 896,<br />
901 (Tex. 1937), With respect to an occupation tax, <strong>Texas</strong> courts have held that this standard<br />
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