Texas Supreme Court Will Hear Franchise Tax Argument
The Texas Supreme Court says it will listen to global food giant Nestle’s argument that the Texas business Franchise Tax is unfair.
In its court filing, Nestle argues that because retailers and wholesalers pay a lower tax rate than manufacturers like Nestle, the so-called “margin tax” should be thrown out. The state argues that the Texas Constitution gives it the right to create separate classifications for tax purposes. Attorney and Supreme Court blogger Don Cruse says even if Nestle wins, it won’t mean the end of the franchise tax.
“The argument that they’re making is whether the tax is fairly applied to them, as a national manufacturer,” Cruse said. “It really wouldn’t apply to most Texas franchise taxpayers.”
Nestle wants its latest tax payment back, which it says totaled more than $8 million.