Thank you for sharing!

Your article was successfully shared with the contacts you provided.
This appeal involves a challenge to the additional tax component of the Texas franchise tax. See Tex. Tax Code Ann. � 171.0011 (West 2002). Universal Frozen Foods Company (“Universal”), its successors-in-interest, ConAgra, Inc. and Lamb Weston, Inc., and Universal Foods Corporation, challenged the validity of the additional tax and asserted, in the alternative, that the amount on which Universal was taxed was improper. After the parties filed competing motions for summary judgment, the trial court denied Universal’s motion and granted summary judgment in favor of Carole Keeton Rylander, successor-in- interest to John Sharp, Comptroller of Public Accounts of the State of Texas and John Cornyn, successor-in-interest to Dan Morales, Attorney General of the State of Texas (collectively the “Comptroller”). We will affirm the district court’s judgment.


In 1991, the Legislature amended the franchise tax statute primarily to add the earned surplus component to the franchise tax calculation. As part of the same amendment, the Legislature constructed the additional tax which forms the basis of this dispute. The franchise tax is an excise tax levied for the privilege of doing business in Texas during the year for which the tax is paid. See General Dynamics Corp. v. Sharp, 919 S.W.2d 861, 866 (Tex. App.-Austin 1996, writ denied). After the 1991 amendment, the Comptroller may assess a corporation’s franchise tax liability based either on that corporation’s capitalization or its earned surplus generated in the previous accounting year. See Tex. Tax Code Ann. �� 171.110, .1532 (West 2002).

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

Pennsylvania Legal Awards (PALA) 2023

June 14, 2023
Philadelphia, PA

The Legal Intelligencer honors lawyers leaving a mark on the legal community in Pennsylvania with their dedication to law.

Learn More

Consulting Top Consultants 2023

June 15, 2023
New York, NY

Consulting Magazine identifies consultants that have the biggest impact on their clients, firms and the profession.

Learn More

Southeastern Legal Awards (SLA) 2023

June 22, 2023
Atlanta, GA

The Daily Report is honoring those attorneys and judges who have made a remarkable difference in the legal profession.

Learn More


Farber, Brocks & Zane, LLP is seeking to add legal talent to its active and growing insurance coverage practice group. For our Garden Ci...

Apply Now ›

Litigation Associate - New York

4-6 Years Minimum Experience with General Liability defense, Property Damage, Labor Law defense. Must be admitted in NY and NJ. Trial experi...

Apply Now ›

Insurance Defense Associate Workers Compensation New York

Downtown AV-rated insurance defense law firm seeks an associate with 2 to 8 years of Workers Compensation insurance defense experience. Req...

Apply Now ›



SCHIRMER LAW LLC Celebrating 7 years of Excellent Service

View Announcement ›



Pond Lehocky Giordano LLP would like to announce that....

View Announcement ›



HARTMANN DOHERTY ROSA BERMAN & BULBULIA LLC's Matrimonial & Family Practice Warmly Welcomes the Honorable Peter J. Melchionne (Ret.) to Lead its New Family Law Dispute Resolution Team.

View Announcement ›