Swift Transportation asks Texas Supreme Court for $1M tax refund

February 8, 2023

Tyson Fisher


Swift Transportation is asking the Texas Supreme Court to hear a tax exemption case that could result in a tax refund worth approximately $1 million.

On Jan. 26, Swift Transportation filed a petition with the Texas Supreme Court. The trucking company claims that the state’s franchise tax is an occupational tax, and therefore it is exempt from the tax.

“This case is also important because it concerns the trucking industry, which, according to Comptroller (Glenn) Hegar, ‘is a crucial component of our state and nation’s economy,’” Swift Transportation stated in its petition.

Texas Transportation Code § 20.001 exempts motor carriers from “any occupation tax measured by gross receipts.” Swift Transportation argues that it is exempt from the franchise tax since it is measured by gross receipts. The Thirteenth Court of Appeals in Texas disagreed.

However, Swift Transportation points out that both the Texas Supreme Court and the Third Court of Appeals have held that the Texas franchise tax is an occupation tax. Therefore, Swift argues, the Thirteenth Court erred when it did not follow those conclusions.

“(The Supreme Court) and the Third Court have both stated that the franchise tax is an occupation tax,” Swift Transportation stated in the petition. “Further, dictionaries and Texas courts define franchise tax and occupation tax the same way: a tax imposed for or on the privilege of carrying on a business. The franchise tax is measured by gross receipts, because gross receipts are used to compute the tax base and apportion a taxpayer’s business activity to Texas. Accordingly, the Thirteenth Court erred by holding that the Texas franchise tax is not an occupation tax and by not holding that it is measured by gross receipts.”

In May 2018, Swift Transportation initiated administrative proceedings with the comptroller, seeking a refund claim for franchise tax paid for reporting years 2014 through 2016. The comptroller denied the request. After the State Office of Administrative Hearings came to the same conclusion, Swift filed a petition in a district court.

Swift Transportation filed a motion for summary judgment, claiming the franchise tax is an occupational tax. The state countered with a motion for summary judgment asking the trial court to conclude the opposite. The trial court granted the state’s summary judgment, which was affirmed by the Thirteenth Court of Appeals.

In its petition, Swift Transportation is seeking more than $979,000 plus interest in the form of a tax return. LL