Texas Tax Roundup—February 2022 (RECOVERED!) – Tax Authorities & More News Here

[In this very special “throwback” edition of the Texas Tax Round
Up, newly reemerged from out the Super-Saragossa Sea of the
Internet, we travel back to a much simpler time-February 2022.]

Howdy y’all! Has it been a month already? We’ve obtained
one other motion-packed month of Comptroller-related information. Here we
go!

Court Cases

Courts of Appeals

Hegar v. Black, Mann, and Graham, L.L.P.,
No. 03-20-00391-CV (Tex. App.-Austin Feb. 25, 2022)

• The Texas Third Court of Appeals held {that a} taxpayer could
  self-assess and pay tax underneath protest for subsequent durations after
  the submitting of a protest swimsuit and embody these durations within the swimsuit
  by amending the petition- in different phrases, there isn’t any
  requirement that the Comptroller truly assess tax for these
  durations. Thus, the Court of Appeals upheld that the District
  Court’s denial of the Comptroller’s plea to the
  jurisdiction for these subsequent durations.




• On the deserves, nonetheless, the Court of Appeals held that the
  taxpayer-a legislation agency that specialised in getting ready mortgage packages for
  lending establishments-bought taxable knowledge processing (as a substitute of
  nontaxable authorized or paralegal) companies from distributors when the
  distributors created an interface between every lenders’ mortgage
  origination methods and the distributors’ doc era
  methods that produced the mortgage package deal, which the legislation agency then
  reviewed to make sure the authorized necessities have been met.

Proposed Rules

Franchise Tax

34 Tex. Admin. Code 3.589 (Margin: Compensation)-Proposing an
replace to the rule on the compensation deduction by incorporating
modifications:

• in statute-
  B. 1286, 83d Leg., Reg. (2013) (regarding skilled
  employer organizations) and
  H.B 1195, 87th Leg., Reg. (2021) (regarding Covid aid
  loans and grants);




• attributable to a court docket case-Winstead PC v. Combs, No.
  D-1-GN-12-000141 (201st Dist. Ct., Travis County Feb. 7, 2013)
  (discovering that sure provisions of the present rule have been invalid
  to the extent they disallowed deductions that have been allowed for
  federal tax functions);




• in Comptroller coverage-STAR Accession Nos. 201510539L (June 14, 2016)
  (stating that wages embody these paid to staff at places of work
  outdoors of the United States and reported on varieties in such overseas
  nation which can be considerably equal to a W-2), and 201206444L (June 12, 2012) (permitting taxpayers
  to amend franchise studies to alter or make an election to deduct
  prices of products bought or compensation).

See 47 Tex. Reg. 715, 753 (Feb. 18, 2022).

Notable Additions to the State Tax Automated Research (STAR)
System

General

Successor Liability

Comptroller’s Decision No. 111,061
(2022)-The ALJ discovered that an operator that acquired pure gasoline
leases was answerable for the pure gasoline severance tax owed by the
previous operator.

Personal Liability

Comptroller’s Decision No. 117,194
(2022)-The ALJ discovered that the Comptroller didn’t show by
clear and convincing proof that an organization’s president was
personally answerable for gross sales and use taxes that the corporate had
did not pay. The Comptroller didn’t present proof exhibiting
that the president was concerned within the firm’s gross sales and use
tax reporting for the durations in query. To the opposite,
proof confirmed that the president didn’t work on the firm, did
not supervise or prepare staff, and didn’t maintain or attend
conferences throughout the years in query.

Franchise Tax

Flow-through Funds

Comptroller’s Decision No. 117,091
(2021)-The ALJ discovered {that a} taxpayer that supplied audiovisual
gear to motels to be used by the motels’ prospects in occasions
couldn’t exclude from gross income sure “gross sales
commissions” that the taxpayer paid to the motels. The
taxpayer didn’t present that the motels have been licensed as actual property
brokers or gross sales brokers underneath Texas Occupations Code chapter 1101
nor that the taxpayer issued Forms 1099-MISC to the motels as
purportedly required by Tex. Tax Code § 171.1011(ok)(1).

Forfeiture

Comptroller’s Decision No. 117,904
(2022)-The ALJ discovered that the only member and officer of a
firm whose company privileges have been forfeited for a interval of
roughly seven months attributable to failure to file a franchise tax
report earlier than being reinstated was answerable for the evaluation of
gross sales tax made in opposition to the corporate for this era and couldn’t
problem the underlying legal responsibility.

Sales and Use Tax

Amusement Services

Comptroller’s Decision No. 117,180
(2021)-The ALJ discovered {that a} taxpayer that bought and resold
tickets to sporting occasions, live shows, and theatrical performances
was offering a taxable amusement service.

Comptroller’s Decision No. 117,326
(2021)-The ALJ decided that an entry payment charged for entry
to driving trails to be used by all-terrain autos was topic to
gross sales and use tax as an amusement service.

Debt Collection Services

Comptroller’s Decision No. 117,422
(2022)-The ALJ discovered {that a} taxpayer was offering taxable debt
assortment companies when it supplied “authorized companies,
transport companies, truck and semi-truck restoration, plane
restoration, skip tracing, submitting court docket orders in Texas and
nationwide, finding property for litigation, and property restoration
companies.”

Real Property Services

Comptroller’s Decision No. 115,679
(2022)-The ALJ discovered {that a} taxpayer’s vent hood
upkeep and cleansing companies have been taxable actual property
companies and that the taxpayer didn’t present proof that the
companies have been exempt from tax underneath Tex. Tax Code § 151.1011
as a result of the vent hoods have been used within the manufacturing of meals.

Manufacturing Exemption

Comptroller’s Decision No. 116,783
(2022)-The ALJ decided {that a} taxpayer that supplied
threading companies on oilfield casing was offering processing
companies and thus might buy sure gadgets tax-free underneath the
manufacturing exemption. In making this willpower, the ALJ
discovered that threading casing causes it to function in a brand new or
totally different method, that the casing couldn’t be put in downhole
with out being threaded, and that the truth that the taxpayer didn’t
personal the casing was irrelevant for functions of the manufacturing
exemption.

Nontaxable Services/Taxable Data Processing Services

STAR Accession No. 202201017L (Jan. 7, 2022)-In
this personal letter ruling, the Comptroller decided {that a}
taxpayer’s charges to reimburse itself for fees by medical
service suppliers for offering copies of medical data and
getting ready requests for medical data weren’t topic to gross sales
and use tax. However, taxpayer’s copy charges for optical
character recognition, digital Bates labeling, bookmarking
data, duplicating movie, and copying CDs have been discovered to be taxable
knowledge processing companies.

Also in February, the Texas Supreme Court heard oral arguments
in Hegar v. Health Care Service Corp., No.
21-0080, regarding insurance coverage taxes. So, possibly we’ll have
an opinion to mull over quickly!

The content material of this text is meant to supply a common
information to the subject material. Specialist recommendation ought to be sought
about your particular circumstances.

POPULAR ARTICLES ON: Tax from United States

I’ve tried to present every kind of stories to all of you latest news today 2022 by this web site and you will like all this information very a lot as a result of all of the information we all the time give on this information is all the time there. It is on trending matter and regardless of the newest information was

it was all the time our effort to achieve you that you just hold getting the newest information and also you all the time hold getting the data of stories by us totally free and likewise inform you individuals. Give that no matter info associated to different forms of information will likely be

made obtainable to all of you so that you’re all the time linked with the information, keep forward within the matter and hold getting today news all forms of information totally free until right this moment so as to get the information by getting it. Always take two steps ahead