Southwest Royalties, Inc., Petitioner v. Glenn Hegar

Summary

The Texas Supreme Court affirmed the Court of Appeals, holding that Southwest Royalties did not prove its equipment was used in "actual manufacturing, processing, or fabrication" of hydrocarbons and therefore is not entitled to the sales‑tax exemption. The Court found the statutory term "processing" unambiguous and applied a plain‑meaning analysis, concluding the equipment was only an indirect cause of the physical changes in the hydrocarbons.