Energy and Environment Reporting for Texas

Texas Judge Will Reconsider Tax Break For Oil and Gas Industry

Photo courtesy of Travis County Court

Judge John Dietz has made a ruling that could cost the state billions in tax revenues.

Travis County District Judge John Dietz is reportedly “reconsidering” a recent decision that could cost the state of Texas billions in tax revenue. Ruling in favor of the drilling company Southwest Royalties a few weeks ago, Judge Dietz found that oil and gas equipment used for exploring and completing wells should not be subject to sales tax, because it qualifies for an manufacturing exemption. Now he’s not so sure that’s the best idea.

The Austin American-Statesman has more:

“On Thursday, the ever-colorful Dietz recalled that he had been reading The Wall Street Journal over a breakfast of oat gruel when he saw that some Texas judge had recently overturned 50 years of tax law and crippled the state budget. “What fool did that?” Dietz said he wondered as he read the story. “I’ll be damned; it’s me.”

Dietz said that he does not typically hold “stinkin’ rehearings” but that the reaction to his ruling two weeks ago had caused him pause.”I worry about being in error,” he said.”

The judge told the Statesman that “he plans to rule within a week” and expects an appeal regardless of what he decides.

Previously: How a New Tax Ruling Favoring the Oil and Gas Industry Could Cost Texas Billions


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