Tobacco Taxes. TX Supreme Court.McLane Company.

The Texas Supreme Court will hear oral arguments on 12/8/15 concerning the Texas Small Tobacco Coalition suit against House Bill 3536 (2013) is constitutional. 

Who is getting involved?

• Comptroller
• Small Tobacco Coalition
• McLane Compny (a distributor)
• TMA
• TTARA
• The State of Indiana

What are they arguing about?

Whether HB3536 is a tax or a fee + some procedural issues raised by the state.

Why does this matter? 2 reasons

• tax policy consquences
• the courts have different review standards for fees & for taxes
  • a fee must meet the standards of due process and equal protection
  • a tax must meet the standard of equal and uniform

What happened to get us to this point?

• District Court ruled for the Small Tobacco Coalition fudning HB3536 unconstitutional tax
• The 3rd Court of Appeals agreed with the district court.
• This keeps the state from collecting the revenue that would be generated by HB 3536

Case 14-0747