Waste Haulers Lose Bid for Texas Franchise Tax Break Declaration

Related companies that dispose of construction waste failed to convince Texas’s statewide intermediate appellate court that they‘re entitled to deduct the costs of goods sold every year when calculating franchise tax liability.

Toro Rojo Inc., which hauls demolition and construction waste to landfills, and Casco Hauling and Excavating Co., which operates a landfill for such waste, sought a declaration that their activities fall under a deduction for taxpayers that furnish labor or materials to construction projects.

But the companies failed to overcome the state’s sovereign immunity protections against declaratory judgments because the comptroller was acting within ...