NUMBER 13-21-00011-CV 

COURT OF APPEALS 

THIRTEENTH DISTRICT OF TEXAS 

CORPUS CHRISTI – EDINBURG 

 

L.L.C., INC. AND 

FUN HOLDINGS, LLC, Appellants,

v.

GLENN HEGAR, COMPTROLLER OF 

PUBLIC ACCOUNTS OF THE STATE 

OF TEXAS AND KEN PAXTON, ATTORNEY

GENERAL OF THE STATE OF TEXAS, Appellees.

 

On appeal from the 53rd District Court 

of Travis County, Texas. 

 

CONCURRING MEMORANDUM OPINION 

Before Chief Justice Contreras and Justices Hinojosa1 and Silva

1 The Honorable Leticia Hinojosa, former Justice of this Court, was a member of the panel at the 

time this case was submitted for oral argument but did not participate in this decision because her term of 

office expired on December 31, 2022.
2

Concurring Memorandum Opinion by Chief Justice Contreras

I agree with the Court’s conclusion because it is compelled by the controlling 

precedent of the transferor court. See TEX. R. APP. P. 41.3. I write separately to note that, 

if this were not a transfer case, I would decide this case differently because I disagree 

with the Austin court’s majority opinion in 1st Global. See id. (noting that, in a transfer 

case, “[t]he court’s opinion may state whether the outcome would have been different had 

the transferee court not been required to decide the case in accordance with the transferor 

court’s precedent”).

The 1st Global majority found that, under Texas Tax Code § 112.051, an “amount 

claimed by the state” does not include an amount which is “self-assess[ed] based on the 

Comptroller’s previously announced general legal position regarding apportionment” of 

franchise taxes. 1st Glob., Inc. v. Hegar, No. 03-19-00740-CV, 2021 WL 5022390, at *3 

(Tex. App.—Austin Oct. 29, 2021, no pet.) (mem. op.). It reasoned that “the phrase ‘the 

amount claimed by the state’ can reasonably be read to require some sort of affirmative 

claim by the state for a specific amount of franchise taxes.” Id. But as recognized in the 

dissenting opinion in 1st Global:

[T]he Texas Legislature chose not to limit the broad language—“the amount 

claimed by the state”—to an amount that the Comptroller calculates that a 

particular taxpayer has underpaid on the original “amount claimed by the 

state.” If the Legislature had sought to limit protest suits to situations in 

which the Comptroller assesses a liability, conducts an audit, issues a 

jeopardy determination, determines a deficiency, or issues a refund 

denial . . . the Legislature would have included language specifying that 

protest suits are limited to those circumstances. 

Id. at *4 (Triana, J., dissenting) (citing TGS-NOPEC Geophysical Co. v. Combs, 340 

S.W.3d 432, 439 (Tex. 2011) (noting that courts presume the Legislature carefully 

chooses a statute’s language, “purposefully omitting words not chosen”)).
3

In this case, the SOB Fee Statute imposes a tax of $5 per customer entry on every

“sexually oriented business” in Texas. See TEX. BUS. & COM. CODE ANN. §§ 102.051–.056. 

It is undisputed that appellants owed SOB Fees for 2020. Based on their own data 

regarding the number of customers served (which the Comptroller does not dispute),

appellants voluntarily paid their 2020 SOB Fees, and the Comptroller received and 

accepted the funds. Under the rationale of the 1st Global majority, appellants did not pay 

an “amount claimed by the state” because their fee was “self-assessed.” See 1st Glob., 

2021 WL 5022390, at *3. I would instead conclude that the Comptroller, acting on behalf 

of the state, “claims” that SOBs owe the SOB Fee “to be paid each year in the amount 

prescribed” by the SOB Fee Statute, “and thus a taxable entity may file a protest letter”

with its SOB Fee “challenging any portion of that amount owed that it contends is 

unlawful.” See id. at *4 (Triana, J., dissenting). It is irrelevant that appellants—as opposed 

to the Comptroller—were the ones who performed the rudimentary arithmetic necessary 

to calculate the precise dollar figure of their total SOB Fee in 2020. The Legislature did 

not intend to deprive appellants of the ability to file a protest suit in this situation. See id.

(observing that “the plain language of [§] 112.051(a)” allows a taxpayer to “pay[] the 

amount of its self-assessed franchise-tax liability under protest with its timely filed regular 

annual report,” and that the Texas Supreme Court “explicitly recognized the validity” of 

this approach in In re Nestle USA, Inc., 387 S.W.3d 610 (Tex. 2012) (orig. proceeding)).

Accordingly, were this case not a transfer case, I would resolve the issue in favor of 

appellants. See TEX. R. APP. P. 41.3.
4

I concur in the Court’s judgment.

DORI CONTRERAS

Chief Justice

Delivered and filed on the

8th day of June, 2023.