Partner Val Perkins’ representation of Sunstate Equipment Co. before the Texas Supreme Court was highlighted in the Law360 article, “Texas Justices Told Tax Deductions Apply to Machine Rentals.”
Perkins is representing Sunstate Equipment, a nationwide provider of top-quality equipment to rent for construction, industrial and special event companies, in Sunstate Equipment Co. LLC v. Texas Comptroller Glenn Hegar and is asking the Texas Supreme Court to allow businesses to claim a state franchise tax deduction for the delivery and pickup costs it incurs in getting machinery to its customers. The Third Circuit Court of Appeals in Austin in January 2017 ruled that it could not include those costs in Texas “costs of goods sold” deductions.
The case asks the state’s high court to settle differences between how the company and the Texas comptroller of public accounts interpreted rules governing what can be included in the statutory deduction. Perkins told the Texas justices that Sunstate and similar businesses should be entitled to the deduction because his client and other rental companies “incur costs each time it rents.”
“What the court of appeals says is, you only get it, your costs, the first time you rent the goods, and that doesn’t make any sense,” he said. “The legislature said you get your costs in relation to the tangible personal property and you get your costs that are directly related to the rental of the goods in question.”