7-Eleven, Inc. v. Combs

Appellant 7-Eleven, Inc. brought suit against Susan Combs, Comptroller of Public Accounts of the State of Texas, and Greg Abbott, Attorney General of the State of Texas (collectively, the “State”) seeking a partial refund of sales tax that the Comptroller assessed on 7-Eleven’s purchase of financial software for its retail stores. The parties filed cross-motions for summary judgment; the trial court granted the State’s motion and denied 7-Eleven’s. On appeal, 7-Eleven asserts that it was entitled to recover taxes assessed on the portion of the sales price of the software that was (1) transferred to stores operated by third-party franchisees, all of which were outside of Texas, and (2) delivered to those 7-Eleven-operated stores (“company stores”) that were located outside of Texas. We will reverse the summary judgment in favor of the State, render judgment that 7-Eleven is entitled to a partial sales-tax refund with respect to the software that it transferred to its franchise stores, and remand to the trial court the portion of the cause pertaining to software that was delivered to its out-of-state company stores.

FACTUAL AND PROCEDURAL BACKGROUND