Sales/Use/Indirect:
Texas District Court Stops Enforcement of Certain Provisions within Local Tax Situsing Rule
Case No. D-1-GN-21-003198, Tex. Dist. Ct., Travis County, Tex. (12/3/24); Case No. D-1-GN-21-003203, Tex. Dist. Ct., Travis County, Tex. (12/3/24). In cases involving a Texas administrative rule on local sales tax situsing and the location where an order is deemed received (i.e., Title 34 Tex. Admin. Code section 3.334 (“Rule 3.334”)) [see State Tax Matters, Issue 2024-27, for more details on Rule 3.334], the Travis County Texas District Court (Court) held that certain sections of the rule contravene existing Texas statutes, and the Texas Comptroller of Public Accounts (Comptroller) did not substantially comply with some aspects of Texas’ Administrative Procedure Act in adopting them. Specifically, the Court ordered that the Comptroller is permanently enjoined from enforcing Rule 3.334, subsections (a)(9), (a)(18), (b)(5), and (c), effective July 4, 2024, “and those subsections are hereby remanded” to the Comptroller “for further consideration not inconsistent with Chapters 151, 321, and 323 of the Texas Tax Code.” Please contact us with any questions.
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