The Texas Comptroller determined that a taxpayer was required to include in its sales factor numerator its receipts from sales of bunker fuel oil to foreign ships in Texas ports. The taxpayer argued that the sales were not from “business done” in Texas even though the oil was delivered to ships in Texas ports. The Comptroller rejected this argument, citing a regulation that provides that receipts from transactions occurring in Texas waters are considered Texas receipts. The taxpayer further argued that this regulation is unconstitutional, but the Comptroller declined to address the argument due to its lack of authority to rule on constitutional matters. (Hearing No. 114,750).
