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.

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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