Supreme Court

22-0974 and 22-0975 - J-W Power

J-W Power v. Sterling Cnty. Appraisal Dist., consolidated for argument with J-W Power v. Irion Cnty. Appraisal Dist.

Case number: 22-0974 and 22-0975
Legal category: Taxes
Subtype: Tax Protests
Set for oral argument: February 20, 2024

Case Summary

The main issue is whether unsuccessful ad valorem tax protests preclude a subsequent motion to correct the appraisal rolls for the same years.

J-W Power owns natural gas compressors and leases them to oil and gas companies throughout the state. When not leased, the compressors are kept by J-W Power in Ector County. For the 2013–2016 tax years, Sterling County appraised J-W Power’s compressors leased in those counties as conventional business personal property. J-W Power filed protests, arguing that under the Tax Code, the compressors qualify as a “dealer’s heavy equipment inventory” that can only be taxed in Ector County where the compressors are based and maintained. The Sterling County Appraisal Review Board denied the protests. J-W Power did not seek judicial review of the denials.

In 2018, the Supreme Court issued an opinion in EXLP Leasing, LLC v. Galveston County Appraisal District that addressed the Tax Code provisions on a “dealer’s heavy equipment inventory.” J-W Power then filed a motion under Section 25.25(c) of the Code to correct the Sterling County appraisal rolls for the years 2013-2016. The Sterling County Appraisal Review Board denied the motion and J-W Power sought judicial review in the district court. The trial court granted summary judgment for the Sterling County Appraisal District. The court of appeals affirmed, holding that the denial of J-W Power’s protests precluded its subsequent motion to correct under the doctrine of res judicata.

J-W Power petitioned for review, challenging the court of appeals’ res judicata holding and analysis. The Supreme Court granted the petition.

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