DAVIS-KEMP TOOL CO., INC., Petitioner, v. Bob BULLOCK, Comptroller of Public Accounts, Respondent, 590 S.W.2d 708

ON APPLICATION FOR WRIT OF ERROR PER CURIAM. Pursuant to the Limited Sales, Excise and Use Tax, Title 122A, Texas Revised Civil Statutes Annotated,

Article 20.01, et seq., Bob Bullock, Comptroller of Public Accounts, assessed a tax and penalty on the consideration paid by Davis-Kemp Tool Co., Inc. for the rental of tools and equipment from its suppliers. The Comptroller considered charges made by Davis-Kemp to its customers for oil well services it performed to be tax exempt, and no tax was assessed on these charges. After Davis-Kemp paid the taxes under protest and its claim for refund was denied, Davis-Kemp brought this suit in district court.

The district court held that the transactions between Davis-Kemp and its suppliers were taxable leases, and rendered judgment for the Comptroller. The court of civil appeals held that the transactions between Davis-Kemp and its suppliers were tax exempt, and that the transactions between Davis-Kemp and its customers were taxable. It then affirmed the district court’s judgment. 584 S.W.2d 579. We affirm the judgments of the court of civil appeals and the district court.

Contrary to the holding of the court of civil appeals, we hold that the Comptroller correctly taxed the transactions between Davis-Kemp and its suppliers, and correctly treated the transactions between Davis-Kemp and its customers as tax exempt. Davis-Kemp’s application for writ of error is refused, no reversible error.