Bill Text: TX HB2080 | 2021-2022 | 87th Legislature | Enrolled

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Bill Title: Relating to taxpayers' suits.

Spectrum: Moderate Partisan Bill (Republican 7-1)

Status: (Passed) 2021-06-07 - Effective on 9/1/21 [HB2080 Detail]

Download: Texas-2021-HB2080-Enrolled.html

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H.B. No. 2080

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. Subchapter A, Chapter 112, Tax Code, is amended
by adding Section 112.003 to read as follows:
Sec. 112.003. ATTORNEY'S 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 4. Section 112.051, Tax Code, is amended by
amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) If a person who is required to pay a tax [or fee] imposed
by this title or collected by the comptroller under any law,
including a local tax collected by the comptroller, contends that
the tax [or fee] is unlawful or that the public official charged
with the duty of collecting the tax [or fee] 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.
(d) This section and Section 112.052 are not severable from
the other provisions of this subchapter. If this section or Section
112.052 is held invalid for any reason, the entire subchapter is
invalid.
SECTION 5. Section 112.052, Tax Code, is amended to read as
follows:
Sec. 112.052. TAXPAYER SUIT AFTER PAYMENT UNDER PROTEST.
(a) A person may bring suit against the state to recover a [an
occupation, excise, gross receipts, franchise, license, or
privilege] tax [or fee] required to be paid to the state if the
person has first paid the tax under protest as required by Section
112.051 [of this code].
(b) A suit under this section must be brought before the
91st day after the date the protest payment was made, or the suit is
barred[, except that for the tax imposed by Chapter 171 for a
regular annual period, if an extension is granted to the taxpayer
under Section 171.202(c) for filing the report and the taxpayer
files the report on or before the last date of the extension period,
the protest required by Section 112.051 may be filed with the report
to cover the entire amount of tax paid for the period, and suit for
the recovery of the entire amount of tax paid for the period may be
filed before the 91st day after the date the report is filed. If the
report is not filed on or before the last date of the extension
period, a protest filed with the report applies only to the amount
of tax, if any, paid when the report is filed].
(c) The state may bring a counterclaim in a suit brought
under this section if 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 if the
counterclaim is filed not later than the 30th day before the date
set for trial on the merits of the suit. 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 subsection.
(d) A taxpayer shall produce contemporaneous records and
supporting documentation appropriate to the tax [or fee] for the
transactions in question to substantiate and enable verification of
a taxpayer's claim relating to the amount of the tax, penalty, or
interest that has been assessed or collected or will be refunded, as
required by Section 111.0041.
SECTION 6. Section 112.053, Tax Code, is amended by
amending Subsections (a) and (c) and adding Subsections (d) and (e)
to read as follows:
(a) A suit authorized by this subchapter must be brought
against the public official charged with the duty of collecting the
tax [or fee], the comptroller, and the attorney general.
(c) A copy of the written protest as originally filed must
be attached to the original petition filed by the person paying the
tax [or fee] with the court and to the copies of the original
petition served on the comptroller, the attorney general, and the
public official charged with the duty of collecting the tax [or
fee].
(d) The attorney general shall represent the comptroller in
a suit under this subchapter.
(e) A person may not intervene in a suit under this
subchapter.
SECTION 7. Section 112.058, Tax Code, is amended by
amending Subsection (a) and adding Subsections (b) and (c) to read
as follows:
(a) [Payments made under protest are to be handled as
follows:
[(1) An officer who receives payments made under
protest as required by Section 112.051 shall each day send to the
comptroller the payments, a list of the persons making the
payments, and a written statement that the payments were made under
protest.
[(2)] The comptroller shall, immediately on receipt of
a payment made under protest under Section 112.051, deposit each
portion of the payment to the credit of the account or fund
[payments to each fund] to which the tax [or fee] paid under protest
is allocated by law.
(b) [(3)] The comptroller shall maintain detailed records
of payments made under protest under Section 112.051.
(c) An amount paid [(4) A payment] under protest under
Section 112.051 bears pro rata interest. The pro rata interest is
the amount of interest earned by the amount paid under protest
[protested funds].
SECTION 8. Section 112.059, Tax Code, is amended to read as
follows:
Sec. 112.059. DISPOSITION OF PROTEST PAYMENTS BELONGING TO
THE STATE. If a suit authorized by this subchapter is not brought
in the manner or within the time required or if the suit is properly
filed and results in a final determination that an amount paid under
protest [a tax payment or a portion of a tax payment made under
protest], including the pro rata amount of interest earned on the
amount [payment], belongs to the state, the comptroller shall
ensure that the proper amount is [has been] deposited to the credit
of the appropriate state account or fund.
SECTION 9. Sections 112.060(c) and (d), Tax Code, are
amended to read as follows:
(c) Each [tax] refund warrant shall be drawn against the
accounts or funds [each fund] to which the amounts [taxes] paid
under protest are allocated by law. If there are not sufficient
funds in an account or fund [each fund to which the taxes paid under
protest are allocated by law] to pay a refund required to be paid
under Subsection (a) [of this section], [then] the comptroller
shall draw the warrant against the General Revenue Fund or other
account or fund [funds] from which refunds [refund appropriations]
may be made, as the comptroller determines appropriate.
(d) The comptroller shall issue each [tax] refund warrant
and shall deliver it to the person entitled to receive it.
SECTION 10. Chapter 112, Tax Code, is amended by adding
Subchapter E to read as follows:
SUBCHAPTER E. SUIT AFTER REDETERMINATION
Sec. 112.201. 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 from the person bringing the suit 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 90 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. 112.202. RECORDS. A person shall produce, in
connection with a suit under this subchapter, contemporaneous
records and supporting documentation appropriate to the tax 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. 112.203. COUNTERCLAIM. (a) The state may bring a
counterclaim in a suit under this subchapter if:
(1) the counterclaim relates to taxes imposed under
the same statute and during the same period as the taxes 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 subject to the counterclaim under any other statute, and the
period of limitation applicable to an assessment of the taxes does
not apply to a counterclaim brought under this section.
Sec. 112.204. 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. 112.205. ATTORNEY GENERAL TO REPRESENT COMPTROLLER.
The attorney general shall represent the comptroller in a suit
under this subchapter.
Sec. 112.206. TRIAL DE NOVO. In a suit under this
subchapter, the issues shall be tried de novo as are other civil
cases.
Sec. 112.207. 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. 112.208. 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 11. The following provisions are repealed:
(1) Section 403.212(e), Government Code;
(2) Sections 112.058(d) and (e), Tax Code; and
(3) Subchapter C, Chapter 112, Tax Code.
SECTION 12. 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 13. This Act takes effect September 1, 2021.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2080 was passed by the House on April
15, 2021, by the following vote: Yeas 144, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2080 on May 24, 2021, by the following vote: Yeas 141, Nays 5,
1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2080 was passed by the Senate, with
amendments, on May 19, 2021, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor