Texas Supreme Court denied Galveston CAD’s motion for rehearing in EXLP Leasing v. Galveston CAD.

Updated: Jan 8, 2019

Supreme Court rules on motion for rehearing in Galveston CAD v. EXLP Leasing:


On Friday, September 28, in its weekly orders, the Texas Supreme Court denied Galveston CAD’s motion for rehearing in EXLP Leasing and EES Leasing v. Galveston CAD. As you recall, at issue was whether the statutory scheme for appraising leased dealer heavy-equipment inventory was unconstitutional and whether situs should be in the county where the equipment is located. Last March, the Court had ruled in favor of the compressor companies and against the CAD and held that the CAD failed to rebut the presumption that Tax Code section 23.1241 is constitutionally valid. Galveston CAD asked the Court to rehear the case, which the Court declined to do today.


Today’s ruling means that the statutory requirement to appraise dealer heavy-equipment inventory at one-twelfth of one year’s rent is valid under the Texas Constitution. The Court’s earlier ruling that situs is the county where the owner conducts business rather than the county of the compressors’ location on January 1 stands as well.


This decision affects all of the pending cases in which the CADs asserted the law is unconstitutional and, as mentioned above, it affects the determination of situs. We’ll be communicating with you on the progress of resolution of your compressor litigation.

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