Hegar Sounds Alarm on Franchise Tax Ruling
Texas stands to lose up to $1.5 billion a year in tax revenue — and could be forced to refund another $6 billion to businesses — unless the state wins its appeal of a recent court decision, Comptroller Glenn Hegar is officially warning top officials.
In April, the 3rd Court of Appeals sided with the parent company of AMC movie theaters and issued a ruling widening the definition of "tangible personal property" under the state's tax code, allowing the chain to lower its tax burden.
If the broader definition stands and is used by all Texas businesses, that translates to an estimated loss of $1.5 billion in franchise tax revenue, Hegar said in a letter addressed to Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Joe Straus last week. Since the ruling applies to taxes collected over the past four years, it could mean up to $6 billion in tax refunds, the comptroller added.
The state is asking the appeals court to reconsider its decision, and will appeal to the Texas Supreme Court if that fails, Hegar's letter said.
Read more: http://www.texastribune.org/2015/06/09/hegar-sounds-alarm-tax-ruling/
