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Spring Branch Independent School District v. Southwest Precision Printers, L.P.
Court of Appeals of Texas, Fourteenth District
November 14, 2019
SPRING BRANCH INDEPENDENT SCHOOL DISTRICT, CITY OF HOUSTON, AND HARRIS COUNTY, TEXAS, Appellants
SOUTHWEST PRECISION PRINTERS, L.P., Appellee
Appeal from the 133rd District Court Harris County, Texas
Trial Court Cause No. 2016-41614
consists of Chief Justice Frost and Justices Spain and
MARGARET "MEG" POISSANT JUSTICE
appeal arises from a suit to collect delinquent taxes on
business personal property. On June 17, 2016, appellant
Spring Branch Independent School District
("District") filed suit against Page International
Communications, L.L.C. ("Page"). Appellants the
City of Houston ("City") and Harris County, Texas
("County"), subsequently intervened. On August 29,
2016, a Chapter 11 involuntary bankruptcy proceeding was
filed as to Page. At that time, appellants learned Page and
appellee Southwest Precision Printers, L.P.
("Southwest") had entered into a Royalty
Agreement ("Agreement") on March 30, 2016,
for the purchase of certain assets. The District, the City
and the County added Southwest as a defendant on the theory
of successor liability pursuant to section 31.081 of the Tax
Code and dismissed Page. See Tax Code § 31.081.
Section 31.081 provides:
(a) This section applies only to a person who purchases a
business, an interest in a business, or the inventory of a
business from a person who is liable under this title for the
payment of taxes imposed on personal property used in the
operation of that business.
(b) The purchaser shall withhold from the purchase price an
amount sufficient to pay all of the taxes imposed on the
personal property of the business, plus any penalties and
interest incurred, until the seller provides the purchaser
(1) a receipt issued by each appropriate collector showing
that the taxes due the applicable taxing unit, plus any
penalties and interest, have been paid; or
(2) a tax certificate issued under Section 31.08 stating that
no taxes, penalties, or interest is due the applicable taxing
(c) A purchaser who fails to withhold the amount required by
this section is liable for that amount to the applicable
taxing units to the extent of the value of the purchase
price, including the value of a promissory note given in
consideration of the sale to the extent of the note's
market value on the effective date of the purchase,
regardless of whether the purchaser has been required to make
any payments on that note.
(d) The purchaser may request each appropriate collector to
issue a tax certificate under Section 31.08 or a statement of
the amount of the taxes, penalties, and interest that are due
to each taxing unit for which the collector collects taxes.
The collector shall issue the certificate or statement before
the 10th day after the date the request is made. If a
collector does not timely provide or mail the certificate or
statement to the purchaser, the purchaser is released from
the duties and liabilities imposed by Subsections (b) and (c)
in connection with taxes, penalties, and interest due the
applicable taxing unit.
(e) An action to enforce a duty or liability imposed on a
purchaser by Subsection (b) or (c) must be brought before the
fourth anniversary of the effective date of the purchase. An
action to enforce the purchaser's duty or liability is
subject to a limitation plea by the purchaser as to any taxes
that have been delinquent at least four years as of the date
the collector issues the statement under Subsection (d).
(f) This section does not release a person who sells a
business or the inventory of a business from any personal
liability imposed on the person for the payment of taxes
imposed on the personal property of the business or for
penalties or interest on those taxes.
(g) For purposes of this section:
(1) a person is considered to have purchased a business if
the person purchases the name of the business or the goodwill
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