Todd Lowther Quoted in Tax Law 360

Posted by Todd Lowther      Todd Lowther was quoted in Tax Law360 (subscription required) about a June 20, 2016 opinion by the Texas Supreme Court in Southwest Royalties Inc. v. Hegar et al., No. 14-0743.  The Texas Supreme Court rejected Southwest Royalties’ principal argument in the case that it should be entitled to a state sales tax exemption related to “manufacturing, processing and fabrication” for oil and gas drilling equipment like casing and tubing.  Nevertheless, the Court refused to adopt the reading of the statute advanced by the Texas Comptroller, which would limit application of the exemption to oil and gas producers on grounds that mineral extraction does not qualify as a processing activity.  As a result, some commentators suggest this decision may leave the door open for future tax refund suits brought by taxpayers that believe their methods will qualify as “processing” under the statute.If you have any questions about the implications of this case, please contact Todd or any of the other tax lawyers at Thompson & Knight.