Sunstate Equipment Co. v. Hegar (Opinion)Annotate this Case
The Supreme Court affirmed the judgment of the court of appeals affirming the Texas Comptroller's audit of Sunstate Equipment, a heavy construction equipment renal company, on the grounds that Sunstate was not entitled to subtract certain delivery and pick-up costs as cost of goods sold (COGS) under Tex. Tax Code 171.1012, holding that Sunstate was not entitled to the subtraction it claimed under either section 171.1012(k-1) nor section 171.1012(i).
After the Comptroller assessed deficiencies, penalties and interest totaling $140,495 Sunstate brought suit for a refund. The district court ordered a full refund of the amount paid, including interest. The court of appeals reversed, concluding that Sunstate was not entitled to subtract costs under section 171.1012(k-1) and that section 171.1012(i) did not independently authorize the cost subtractions. The Supreme Court affirmed, holding that neither statutory provision authorized Sunstate to subtract its delivery and pick-up costs as COGS.