American Multi-Cinema, Inc.// Glenn Hegar, Comptroller of Public Accounts of the State of Texas And Ken Paxton, Attorney General of the State of Texas v. Glenn Hegar, Comptroller of Public Accounts of the State of Texas And Ken Paxton, Attorney General of the State of Texas// Cross-Appellee, American Multi-Cinema, Inc.
ACCEPTED
03-14-00397-CV
14388158
THIRD COURT OF APPEALS
AUSTIN, TEXAS
12/20/2016 4:09:42 PM
JEFFREY D. KYLE
CLERK
FILED IN
3rd COURT OF APPEALS
AUSTIN, TEXAS
12/20/2016 4:09:42 PM
December 20, 2016 JEFFREY D. KYLE
Clerk
Jeffrey D. Kyle Via EFileTexas.gov
Clerk of the Court
Third Court of Appeals
209 West 14th Street, Room 101
Austin, Texas 78701
Re: 03-14-00397-CV; American Multi-Cinema, Inc. v. Glenn Hegar, Comptroller of
Public Accounts of the State of Texas, and Ken Paxton, Attorney General of the
State of Texas
Dear Mr. Kyle:
By this letter, Appellees/Cross-appellants Comptroller Glenn Hegar and Attorney General
Ken Paxton (together, the Comptroller) notify the Court of developments bearing on the pending
motion for rehearing and reconsideration en banc, filed on June 5, 2015. Please file this letter and
circulate it to the Court.
On pages 9–10 of his Motion for Rehearing and for Reconsideration en Banc, and pages 7-8
of his Reply in Support of Motion for Rehearing and for Reconsideration en Banc, the Comptroller
warned that the panel opinion’s construction of “tangible personal property” might lead to tax-
exemption claims for the “sale” of experiences such as sporting events, music concerts, art
exhibitions, rodeos, and carnivals, and claims of “costs of goods sold” for the cost of providing
services such as examination rooms, lawyer’s offices, sporting facilities, and the like. There are
now three cases pending in Travis County district courts in which taxpayers are claiming to have
sold tangible personal property when patrons were provided admission to events where they had
sensory experiences:
1. Dallas World Aquarium Corp. v. Glenn Hegar, Comptroller of Public Accounts
of the State of Texas and Ken Paxton, Attorney General of the State of Texas;
Cause No. D-1-GN-15-004255; 345th District Court, Travis County: Plaintiff
claims that it is selling “tangible personal property” to patrons when it provides
admission because the patrons sense the animals and atmosphere as they pass
through the aquarium/zoo.
2. Hollywood Theaters, Inc. v. Glenn Hegar, Comptroller of Public Accounts of
the State of Texas and Ken Paxton, Attorney General of the State of Texas;
Cause No. D-1-GN-15-002935; 345th District Court, Travis County. Like
AMC, plaintiff claims that it is selling “tangible personal property” by
providing admission to the exhibition of movies.
P os t Offic e B ox 12548 , Au stin , Texa s 7 8 7 1 1 - 2 5 4 8 • ( 5 1 2 ) 4 6 3 - 2 1 0 0 • www. t exa sa tt or n eygen era l. gov
Jeffrey D. Kyle, Clerk of the Court
Texas Third Court of Appeals
03-14-00397-CV; Post-Submission Letter
December 20, 2016
Page 2
3. Colonial Country Club v. Glenn Hegar, Comptroller of Public Accounts of the State
of Texas and Ken Paxton, Attorney General of the State of Texas; Cause No. D-1-
GN-16-005464; 201st District Court, Travis County: Plaintiff claims that it is
selling “tangible personal property” when it sells spectator tickets to an annual PGA
golf tournament.
Of these cases, the first two have been abated pending the outcome of this case. The third
case, which was very recently filed, is currently pending.
Very truly yours,
/s/ Cynthia A. Morales
Cynthia A. Morales
Texas Bar No. 14417420
Assistant Attorney General
Financial Litigation and Charitable Trusts Division
Tel: (512) 475-4470
cynthia.morales@oag.texas.gov
CAM:lje
Cc: Doug Sigel Via EFileTexas.gov
Ryan Law Firm, LLP
CERTIFICATE OF SERVICE
On December 20, 2016, the foregoing document was served on Appellant/Cross-Appellee
through its attorney of record, Doug Sigel via EFileTexas.gov and by email at
doug.sigel@ryanlawllp.com.
/s/ Cynthia A. Morales
Cynthia A. Morales
Assistant Attorney General
P os t Offic e B ox 12548 , Au stin , Texa s 7 8 7 1 1 - 2 5 4 8 • ( 5 1 2 ) 4 6 3 - 2 1 0 0 • www. t exa sa tt or n eygen era l. gov