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Texas Court Rules Natural Gas Destined for Interstate Commerce Properly Subject to Local Property Tax

The Texas First Court of Appeals has ruled that the owner of natural gas stored in a Texas reservoir was properly assessed local property tax, regardless of whether the gas was sold in interstate commerce. Rejecting the taxpayer’s contention that the “dormant” U.S. Constitution Commerce Clause rendered the assessment unconstitutional, the Court concluded that the tax did not fail any of the four prongs of the substantial nexus test established in Complete Auto.

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