Hallmark Marketing Company, Llc v. Glenn Hegar, Comptroller of Public Accounts of the State of Texas, and Ken Paxton, Attorney General of the State of Texas

This case arises from a franchise-tax protest suit Hallmark filed against the state comptroller. The Tax Code provides that “only the net gain” from the sale of investments should be included in a key component of the statutory franchise-tax formula. The comptroller, however, adopted a rule requiring businesses to include net gain or a net loss. As a result, Hallmark paid more than $200,000 in taxes than it believes was required, so it sued the comptroller' for a refund. The trial court and court of appeals deferred to the comptroller’s rule. Because we agree with Hallmark that “only the net…