ChampionX prevails in tax dispute over Texas Manufacturing Exemption in district court and business Court of Appeals

Client(s) ChampionX, LLC

Jones Day represented ChampionX, LLC (“ChampionX”), a subsidiary of Ecolab Inc., which succeeded in Texas sales and use tax refund litigation in the Texas business court of appeals concerning whether returnable containers used to hold hazardous chemicals (and related services) qualified for the Texas Manufacturing Exemption (Tax Code § 151.318) and the services exemption (Tax Code § 151.3111). After ChampionX prevailed on summary judgment in the district court, the Texas Fifteenth Court of Appeals affirmed, holding that the Manufacturing Exemption and the separate Container Exemption (Tax Code § 151.322) are not irreconcilable and the Container Exemption does not preclude relief under the Manufacturing Exemption. It also rejected the state’s argument that the containers were excluded as transportation or storage property. Based on this ruling, the Comptroller processed refund checks to ChampionX.

Hancock v. ChampionX, LLC, No. 15-24-00111-CV (Tex. App. 15th)