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

"requires some definite link, some minimum connection, between a state and the person,
property, or transaction it seeks to tax." Quill Corp. v. North Dakota, 504 U.S. 298, 312 (1992)
(quoting Miller Bros. v, Maryland, 347 U.S. 340, 344-45 (1954)); see U.S. CONST. Amend XIV,
§ 1. In the case of a tax on an activity, there must be a connection to the activity itself, rather
than a connection only to the entity the State seeks to tax. Allied-Signal, Inc. v. Director, Div. of
Taxation, 504 U.S. 768 (1992). The test is whether the taxing power exerted by a state bears
fiscal relation to protection, opportunities, and benefits given by the state, Wisconsin v, J. C.
Penney Co., 311 U.S. 435, 444 (1940); Norfolk & W Ry. v. Mo. State Tax Comm'n,
390 U.S.
317, 326 n.5 (1968). The simple but controlling question is whether the State has given anything
for which it can ask a return. J.C. Penney, 311 U.S. at 444.
30, The Margin Tax imposes a 0.5% tax on wholesalers and retailers and a 1% tax on
manufacturers, Pursuant to the Due Process Clause, this significant difference in tax rate must
be based on a difference in the protections, opportunities, and benefits conferred by Texas on the
entities. In other words, manufacturers must receive greater benefits from Texas than
wholesalers and retailers receive. This is not the case with entities, such as Nestle, that
manufacture outside of Texas, but only wholesale and/or retail within Texas. Such entities do
not receive any additional benefits from Texas with respect to their manufacturing operations.
By taxing these entities based on activities for which Texas confers no benefit, the Margin Tax
violates the Due Process Clause of the United States Constitution,
D. The Margin Tax Violates the Commerce Clause of the United States Constitution.
31. The Commerce Clause prohibits discrimination against interstate commerce and
bars state regulation that unduly burdens interstate commerce. Quill, 504 U.S. at 312; see U.S.
CONST. art. 1, § 8. Specifically, the Commerce Clause requires that a state tax (1) be applied to
an activity with a substantial nexus with the taxing state, (2) be fairly apportioned, (3) not
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