Indirect/Sales/Use:
Texas Supreme Court Denies Reviewing Case Awarding Taxpayer a Manufacturing Exemption
Case No. 22-0098, Tex. (petition for review denied 4/29/22). The Texas Supreme Court denied reviewing a Texas Court of Appeals ruling from earlier this year [see Case No. 07-20-00301-CV, Tex. Ct. App. (1/3/22) and State Tax Matters, Issue 2022-1, for more details on this earlier ruling ], which held in a taxpayer’s favor that its printing of third-party advertising on the reverse side of its produced cash register tapes qualifies as “manufacturing” under Texas Tax Code section 151.318, thus exempting it from sales tax for electricity use during its production process. Among other reasons, the Texas Court of Appeals had explained that the taxpayer successfully showed that to fulfill its agreements with its customers, the equipment at issue was “necessary and essential” to the actual manufacture of the cash register tapes it sold. Please contact us with any questions.
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