Despite its long-term and generally well-deserved reputation as a business-friendly state, recent sales tax and franchise tax developments evidence Texas’s increasingly aggressive pursuit of tax revenue. Whether fueled by the comptroller’s desire to increase tax revenue in an uncertain economy, to close perceived loopholes on which taxpayers rely, or to seek sound tax policy, the result over the last two years is largely the same: taxpayers find themselves faced with higher bills, changing tax policies and, equally bad, uncertainty. In the sales tax arena, as in the franchise tax arena, the comptroller remains willing to meet with industry representatives to discuss and resolve issues, including prospective changes to longstanding administrative rules. On the other hand, the comptroller is also willing to change her interpretation of law to shore up the agency’s position in the midst of ongoing audits and court cases. Property tax disputes with local taxing jurisdictions, facing their own costs and challenges, also demonstrate the impact of a taxing authority’s practice and procedures, and offer further evidence that tax interpretation and revenue needs are sometimes inextricably linked.
Cynthia M. Ohlenfrost, et al., Taxation, 66 SMU L. Rev. 1181 (2013)