The Texas Supreme Court will review the appellate court decision in Southwest Royalties v. Glenn Hegar, Comptroller of Public Accounts, setting oral arguments for March 8, a Jan. 25 press release from global tax services firm Ryan LLC said. The case addresses the taxability of oil and gas production equipment used below ground.
Dallas-based Ryan is the tax adviser for Southwest Royalties and helped develop the case. G. Brint Ryan, chairman and CEO, said the firm contends that below-ground equipment used in oil and natural gas production qualifies for the Texas manufacturing exemption under the Texas Tax Code Sec. 151.318.
The case was tried in 2012 before Travis County Judge John Dietz, who initially said he agreed with the taxpayer that below-ground equipment used in or during the actual processing of oil and gas qualified for the manufacturing exemption under the state’s tax code. However, Dietz subsequently reversed himself in his written judgment and the Texas Court of Appeals, Third District, upheld the decision on August 13, 2014.
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