Combs v. Roark Amusement & Vending, LP (Opinion)

State: Texas

Docket No: 11-0261

Case Date: 03/08/2013

Plaintiff: Combs

Defendant: Roark Amusement & Vending, LP (Opinion)

Preview:IN THE SUPREME COURT OF TEXAS
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NO . 11-0261
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SUSAN COMBS, COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS, AND G REG A BBOTT , A TTORNEY G ENERAL OF THE STATE OF TEXAS, PETITIONERS,
v.

ROARK AMUSEMENT & VENDING, L.P., RESPONDENT
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ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE THIRD DISTRICT OF TEXAS
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Argued October 15, 2012

JUSTICE WILLETT delivered the opinion of the Court. Roark Amusement & Vending, L.P. brought this tax-refund suit against the Comptroller of Public Accounts, seeking to recoup sales taxes it paid on "plush toy" prizes used to stock its coinoperated amusement machines. The court of appeals held the toys were exempt from sales tax under the Tax Code's sale-for-resale exemption. We agree and affirm the court of appeals' judgment. I. Factual and Procedural Background The facts are undisputed, having been established below in a stipulation of facts or in uncontested affidavits. Roark owns and leases coin-operated amusement crane machines that are found in supermarkets, restaurants, and shopping malls throughout Texas. Customers aim to win

plush toys by using a joystick to maneuver a mechanical claw to grab the toys and drop them into a prize chute. Successful customers keep the prizes, and eventually all the toys become property of customers in this manner (except for those lost, stolen, or damaged). Roark sought a refund of the sales taxes it paid on the toys it purchased to stock its machines for the period October 1, 2000 through February 29, 2004.1 It argued that the toys were exempt under the sale-for-resale exemption discussed below. The Comptroller disputed that the exemption applied. The trial court granted the Comptroller's motion for summary judgment and denied Roark's refund request. The court of appeals reversed, concluding the toys were exempt, and remanded the case to the trial court for a determination of the refund amount due Roark.2 We granted the Comptroller's petition for review. II. Discussion Our decision turns on the interplay of various Tax Code provisions found in chapter 151.

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