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

discriminate against interstate commerce, and (4) fairly relate to the services provided by the
state.
Complete Auto Transit, Inc, v. Brady, 430 U.S. 274, 279 (1977). A valid tax must treat
similarly situated in-state and out-of-state taxpayers equally.
Tyler Pipe Indus. v. Wash, State
Dep't of Revenue, 483 U.S. 232, 246 (1987) (citing Halliburton Oil Well Cementing Co, v. Reily,
373 U.S. 64, 70 (1963)), Further, the measure of the tax must be reasonably related to the extent
of the taxpayer's presence or activities within the taxing state and to the taxpayer's consequent
enjoyment of the opportunities that the state has afforded. Rylander v. 3 Beall Bros. 3, Inc., 2
S.W.3d 562, 571 (Tex. App.—Austin 1999, pet. denied) (citing Commonwealth Edison Co. v.
Montana, 453 U.S. 609, 629 (1981)).
32. The Margin Tax imposes a tax rate that is often dependent on a taxpayer's
activities outside of Texas. For example, Nestle is subject to a tax rate of 1.0% rather than 0.5%
based solely on the fact that it manufactures in other states. The Margin Tax discriminates
against interstate commerce by subjecting entities to a higher tax rate based solely on the fact
that they conduct certain activities in interstate activities. The Margin Tax also is not fairly
related to the services provided by Texas because it imposes different tax rates on similarlysituated
wholesalers based on their operations in other states, which operations have no relation
to the services provided by Texas. Because it discriminates against interstate commerce and
does not fairly relate to the services provided by Texas, the Margin Tax violates the Commerce
Clause of the United States Constitution.
VI. REQUEST FOR RELIEF
WHEREFORE, Plaintiffs requests that Defendants Susan Combs, the Comptroller of
Public Accounts of the State of Texas, and Greg Abbott, the Attorney General of the State of
Texas, be cited to appear and answer herein and on final hearing Plaintiff have a judgment: