David Sewell and Gilbert Bernal represented the taxpayer in the case of Combs v. Richmont Aviation, Inc. The Texas Supreme Court decided the case in favor of the taxpayer. Based on the Court’s decision, the State of Texas can no longer require taxpayers to pay an amount of disputed tax as a precondition to challenging the tax in district court. You can find the Supreme Court’s record of the case on its website at the following link: http://www.search.txcourts.gov/Case.aspx?cn=13-0857. The Supreme Court’s website also includes a link to the Court of Appeals opinion in favor of the taxpayer.
In the case, Richmont Aviation, Inc. was assessed sales tax on its purchase of an airplane. Richmont filed a lawsuit in Travis County District Court to contest the tax, but it chose not to pay the disputed tax at the time that it filed its lawsuit. The district court dismissed Richmont’s lawsuit because it ruled that Richmont was not entitled to sue in district court without first paying the disputed tax. The district court relied on Texas Tax Code sec. 112.108 for its decision.
Richmont appealed the dismissal to the Third Court of Appeals and argued that the district court’s application of Tax Code sec. 112.108 violated the Texas Constitution’s guarantee that all courts will be open to the citizens of the state without unreasonable financial barriers. The court of appeals ruled in favor of Richmont, reversed the district court, and held that Tax Code sec. 112.108 was unconstitutional. The State filed a petition for review with the Texas Supreme Court, but the Court denied the State’s petition on August 22, 2014. The decision in the case is now final.