Texas Sales Tax: Appeals Court Doubles Down on Pay-to-Play Requirement

Twice in a row, the Texas courts have held that a taxpayer must pay the full amount claimed due in order to gain access to the Texas courts to challenge a tax assessment. See Hegar v. CHZP and EBS Solutions v. Hegar. The court reached this conclusion notwithstanding the Texas constitutional provision that allows all residents, including corporations carrying on business in Texas, open access to the Texas courts to resolve their disputes. This provision was previously implemented under Texas Tax Code § 112.108, which allowed taxpayers who could not afford to pay the full assessment access to the courts upon submission of an affidavit demonstrating inability to pay, and hearing on same. That statute has since been held unconstitutional, however, leaving the state of the law in flux, and making the issue of pay-to-play ripe for review by the Supreme Court of Texas.