By: Huffman S.B. No. 769
A BILL TO BE ENTITLED
AN ACT
relating to taxpayers' suits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 403.202(a), Government Code, is amended
to read as follows:
(a) If a person who is required to pay to any department of
the state government an occupation, excise, gross receipts,
franchise, license, or privilege tax or fee, [other than a tax or
fee to which Subchapter B, Chapter 112, Tax Code, applies] or
another [a] tax or [other] amount imposed under Subtitle A, Title 4,
Labor Code, contends that the tax or fee is unlawful or that the
department may not legally demand or collect the tax or fee, the
person shall pay the amount claimed by the state, and if the person
intends to bring suit under this subchapter, the person must submit
with the payment a protest.
SECTION 2. Subchapter J, Chapter 403, Government Code, is
amended by adding Section 403.222 to read as follows:
Sec. 403.222. APPLICABILITY. This subchapter does not
apply to a suit under Chapter 112, Tax Code.
SECTION 3. Section 111.207(a), Tax Code, is amended to read
as follows:
(a) In determining the expiration date for a period when a
tax imposed by this title may be assessed, collected, or refunded,
the following periods are not considered:
(1) [the period following the date of a tax payment
made under protest, but only if a lawsuit is timely filed in
accordance with Chapter 112;
[(2)] the period during which a judicial proceeding is
pending in a court of competent jurisdiction to determine the
amount of the tax due;
(2) [(3)] the period during which an administrative
redetermination or refund hearing is pending before the
comptroller; and
(3) [(4)] the period during which an indictment or
information is pending for a felony offense related to the
administration of the Tax Code against any taxpayer or any person
personally liable or potentially personally liable for the payment
of the tax under Section 111.0611.
SECTION 4. Subchapter A, Chapter 112, Tax Code, is amended
by adding Section 112.003 to read as follows:
Sec. 112.003. ATTORNEY FEES. Except for a sanction under
Chapter 10, Civil Practice and Remedies Code, or the Texas Rules of
Civil Procedure, attorney's fees may not be awarded in a suit
seeking legal or equitable relief against the state, a state
agency, or an officer of the state relating to the applicability,
assessment, collection, constitutionality, or amount of a tax, fee,
or penalty imposed by this title or Title 3 or collected by the
comptroller under any other law.
SECTION 5. The heading to Subchapter B, Chapter 112, Tax
Code, is amended to read as follows:
SUBCHAPTER B. SUIT AFTER REDETERMINATION [PROTEST PAYMENT]
SECTION 6. Subchapter B, Chapter 112, Tax Code, is amended
by adding Sections 112.061, 112.062, 112.063, 112.064, 112.065,
112.066, 112.067, and 112.068 to read as follows:
Sec. 112.061. SUIT AFTER REDETERMINATION. (a) A person may
sue the comptroller to dispute an amount of tax, penalty, or
interest assessed in a deficiency redetermination or jeopardy
redetermination under Chapter 111 if the person has:
(1) filed a request for redetermination under Chapter
111;
(2) obtained a redetermination under Chapter 111 that
includes a finding by the comptroller of the disputed and
undisputed amounts; and
(3) filed a motion for rehearing of the
redetermination that complies with Chapter 2001, Government Code,
and that states the specific grounds of error and the disputed
amounts associated with the grounds of error.
(b) A person bringing a suit under this subchapter shall
pay, as provided by Chapter 111, the redetermination amounts that
are not disputed in the motion for rehearing. The failure to pay an
undisputed amount does not affect the jurisdiction of a court to
consider a suit that complies with Subsection (a).
(c) A person bringing a suit under this subchapter may pay
the disputed amounts as provided by Chapter 111. A disputed amount
that is not paid as provided by Chapter 111 and that is determined
to be due in a final judgment accrues penalties and interest as
provided by Chapter 111. After the comptroller has been timely
served in a suit that complies with this subchapter, the
comptroller and the attorney general are enjoined from collecting
disputed amounts during the pendency of the suit but are not
enjoined from asserting tax liens. Damages may be awarded under
Chapter 65, Civil Practice and Remedies Code, if the court
determines that all or part of the enjoined collection amounts were
disputed solely for delay.
(d) A suit under this subchapter must be brought against
both the comptroller and the attorney general.
(e) A suit under this subchapter must be filed before the
expiration of 60 days after the issue date of the denial of the
motion for rehearing or it is barred.
(f) The disputed and undisputed amounts of the
redetermination must be set out in the original petition. A copy of
the motion for rehearing must be attached to the original petition
filed with the court and to the copies of the original petition
served on the comptroller and the attorney general.
(g) A person may not intervene in a suit under this
subchapter.
Sec. 112.062. RECORDS. A person shall produce, in
connection with a suit under this subchapter, contemporaneous
records and supporting documentation appropriate to the tax or fee
for the transactions in question to substantiate and enable
verification of the person's claim relating to the amount of the
tax, penalty, or interest that has been assessed or collected, as
required by Section 111.0041.
Sec. 112.063. COUNTERCLAIM. (a) The state may bring a
counterclaim in a suit under this subchapter if:
(1) the counterclaim relates to taxes or fees imposed
under the same statute and during the same period as the taxes or
fees that are the subject of the suit; and
(2) the counterclaim is filed not later than the 30th
day before the date set for trial on the merits of the suit.
(b) The state is not required to make an assessment of the
taxes or fees subject to the counterclaim under any other statute,
and the period of limitation applicable to an assessment of the
taxes or fees does not apply to a counterclaim brought under this
section.
Sec. 112.064. ISSUES IN SUIT. (a) The grounds of error
contained in the motion for rehearing are the only issues that may
be raised in a suit under this subchapter.
(b) A suit under this subchapter applies only to a tax
liability period considered in the comptroller's redetermination.
Sec. 112.065. ATTORNEY GENERAL TO REPRESENT COMPTROLLER.
The attorney general shall represent the comptroller in a suit
under this subchapter.
Sec. 112.066. TRIAL DE NOVO. In a suit under this
subchapter, the issues shall be tried de novo as are other civil
cases.
Sec. 112.067. JUDGMENT. (a) The amount of a judgment
refunding disputed taxes, penalties, or interest paid to the
comptroller shall be credited against any tax, penalty, or interest
imposed by this title and due from the plaintiff.
(b) The remainder of the amount of a judgment not credited
against a tax, penalty, or interest shall be refunded to the
plaintiff.
(c) The plaintiff is entitled to interest on the amount of
tax refunded in a judgment for the plaintiff equal to the amount of
interest that would be due if the tax had been deposited in the
suspense account of the comptroller. The interest accrues beginning
from the date that the tax was paid until:
(1) the date that the amount is credited against the
plaintiff's tax liability; or
(2) a date determined by the comptroller that is not
sooner than 10 days before the actual date on which a refund warrant
is issued.
Sec. 112.068. RES JUDICATA. The rule of res judicata
applies in a suit under this subchapter only if the issues and the
tax liability periods in controversy are the same as were decided in
a previous final judgment entered in a Texas court of record in a
suit between the same parties.
SECTION 7. The following provisions are repealed:
(1) Section 403.212(e), Government Code;
(2) Sections 112.051, 112.052, 112.053, 112.054,
112.055, 112.056, 112.057, 112.058, 112.059, and 112.060, Tax Code;
and
(3) Subchapter C, Chapter 112, Tax Code.
SECTION 8. The changes in law made by this Act apply only to
a suit to dispute an amount of tax, penalty, or interest that
becomes due and payable on or after the effective date of this Act.
A suit to dispute an amount of tax, penalty, or interest that became
due and payable before the effective date of this Act is governed by
the law as it existed immediately before the effective date of this
Act, and the former law is continued in effect for that purpose.
SECTION 9. This Act takes effect September 1, 2021.