View this article online: https://www.insurancejournal.com/news/southcentral/2011/10/25/221504.htm
Attorneys for the state are set to defend Texas’ business tax.
Claims that it violates the Texas Constitution are part of a case that began Oct. 24 in the Texas Supreme Court.
A Boerne insurance adjustment firm, Allcat Claims Service LP, filed a lawsuit in July, claiming the tax violates a constitutional provision that requires the Legislature to get voter approval before imposing an income tax, according to a report in the Austin American-Statesman.
The case hinges on whether the margins tax — implemented in 2006 as part of the court-ordered school finance fix — constitutes an income tax when applied to certain business partnerships.
The tax is a major source of funding for public education.
The law includes a provision that any legal challenges to the law would go straight to the Texas Supreme Court.