Sunoco fights JCAD over inclusion of oil in pipeline on tax roll

Kelly Holleran Oct. 18, 2010, 7:30am

Sunoco Inc. claims the Jefferson County Appraisal District forced it to pay taxes for oil that should not have been considered the company's property.

Sunoco filed a lawsuit Oct. 5 in Jefferson County District Court against the Jefferson County Appraisal District and the Jefferson County Appraisal District Appraisal Review Board.

The oil refiner claims JCAD wrongly taxed it for crude oil that had moved through a Nederland Terminal on the Sabine-Neches waterway between Beaumont and Port Arthur on Jan. 1.

Because the Nederland Terminal served to transport the oil to out-of-state delivery ports, JCAD should not have taxed Sunoco, according to the complaint.

"The movement of the crude oil in question through the Nederland Terminal was required by the logistics of the transportation process; such movement was not for the convenience of Plaintiff," the suit states. "Therefore, the crude oil at issue herein did not have the requisite nexus with Texas."

Sunoco filed a protest with the Appraisal Review Board, arguing against the inclusion of the oil in its 2010 tax year. Despite Sunoco's evidence that the oil was in transit at the time in question and that the oil was exempt from taxation, the Appraisal Review Board still placed the oil on the 2010 appraisal rolls, the complaint says.

In its complaint, Sunoco wants the court to determine that the crude oil was in transit and thus is exempt from property taxation, to order that the crude oil be deleted from the district's 2010 appraisal rolls and to order the defendants to undertake all post-appeal administrative procedures. In addition, it seeks attorney's fees, suits and other relief the court deems just.

James D. Thompson III and Glen A. Rosenbaum of Vinson and Elkins in Houston will be representing it.

The case has been assigned to Judge Gary Sanderson, 60th District Court.

Jefferson County District Court case number: B188-531

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