Court Opinion

ID: 9679602
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:58:35.433855+00
Date Added: 2024-06-11T13:09:01.925336
License: Public Domain

HUGHES, Justice
(concurring).
The income tax deferment granted taxpayers by the federal government does not in any manner diminish the franchise tax which appellee taxpayers pay or will continue to pay to this State. Such tax will be constant whether taxpayers accept the proffered deferment or whether they choose to pay their federal income taxes on a normal basis.
I agree that a reserve to pay deferred taxes is not surplus and that it should not be used as a basis for calculating the franchise tax due the State by appellees. According to the evidence, this reserve fund will actually be used to pay deferred income taxes, and upon such payment will be exhausted. This is a true reserve. It is in sharp contrast with the untouchable reserve sustained in Huey & Philp Hardware Co. v. Shepperd, 151 Tex. 462, 251 S.W.2d 515, where the Supreme Court held that both a reserve for bad debts and the bad debts were deductible for franchise tax purposes.