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

elationship to the value of the Privilege.
20. The assignment of a tax rate of 0.5% to retailers and wholesalers, and 1.0% to all
other taxpayers, is unreasonable in the same respect.
See id, § 171,002. Retailers and
wholesalers exercise the same Privilege, and not one-half of the Privilege, as all other taxpayers.
The imposition of a tax rate for certain taxpayers that is one-half the tax rate for other taxpayers,
in exchange for the same Privilege, fails to exact a tax commensurate with the value of the
Privilege.
B. The Margin Tax Violates the Equal Protection Clause of the United States
Constitution
21. The Equal Protection Clause commands that no state shall "deny to any person
within its jurisdiction the equal protection of the laws." U.S. CONST. amend. XIV, § 1. It forbids
a state from treating differently persons who are in all relevant respects alike. Nordlinger v.
Hahn, 505 U.S. 1, 10 (1992). With regard to state taxation, the Equal Protection Clause forbids
disparate treatment of taxpayers that has no rational basis or that is palpably arbitrary.
Allied
Stores of Ohio v. Bowers, 358 U.S. 522, 527 (1959). Any disparate treatment must rest upon
some ground or difference having a fair and substantial relation to the object of the legislation.
Id. The relationship of the classification to its goal must not be so attenuated as to render the
distinction arbitrary or irrational. Nordlinger, 505 U.S. at 11.
22. Thus, pursuant to the Equal Protection Clause, the Margin Tax may not treat
differently persons who are in all relevant respects alike. Any classifications imposed by the
Margin Tax must have a rational basis and must be fairly and substantially related to the object
of the tax—to tax the value of the Privilege. See Nat'l Bancshares Corp, 584 S.W.2d at 270;
Gen. Dynamics Corp., 547 S.W.2d at 257-58; Rylander v. Fisher Controls Intl, 45 S.W.3d 291,
293 (Tex. App.—Austin 2001, no pet.).
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