Tgs-Nopec Geophysical Company D/b/a Tgs-Nopec Corporation, Petitioner v. Susan Combs, Successor-In-Interest To…

Summary

The Texas Supreme Court reversed a court of appeals judgment upholding the Comptroller's additional franchise tax assessment against TGS-NOPEC for receipts from licensing its proprietary seismic data library to Texas customers. Construing Tex. Tax Code § 171.103(a)(4) through noscitur a sociis, legislative history, and the Comptroller's own regulations, the court held that 'license' in the use-based sourcing provision means only licenses that are themselves revenue-producing assets, not the mechanism of licensing other intangible property. TGS's receipts are therefore a limited sale of an intangible sourced under subsection (6)'s catch-all to the payor's legal domicile, and the Comptroller's contrary construction conflicted with her own rules. The Court reversed and remanded to the trial court for further proceedings.