Supreme Court Requests Response to Instill’s Petition for Review

October 8, 2019

The Supreme Court of Texas has recently asked the Comptroller to file a response to Instill Corporation’s Petition for Review before the Supreme Court.

The case is Instill Corporation v. Hegar, No. 19-0546.

Instill petitions from a Texas Court of Appeals, Third District, decision holding that Instill is engaged in selling taxable data processing services. Instill argues that it is selling nontaxable “information services” and should therefore not pay sales tax on such transactions.

Instill, represented by Doug Sigel of Ryan Law Firm, PLLC, argues that the Third Court of Appeals:

  • Failed to follow the Supreme Court’s essence of the transaction test to determine taxability;
  • Disregarded precedent from its own decisions as well as precedent from the Fourteenth Court of Appeals;
  • Misconstrued the phrase “provided by the customer,” effectively rewriting Comptroller Rule 3.342;
  • Erroneously applied strict construction backwards, resolving doubt regarding the scope of taxation against taxpayers.

For more information, contact:

Doug Sigel
Practice Group Leader, Sales & Use and Income Tax