Case against Texas business tax before top court

October 24, 2011 4:40:23 AM PDT
Attorneys for the state are set to defend Texas' business tax.

Claims that it violates the Texas Constitution are part of a case starting Monday in the Texas Supreme Court.

A Boerne insurance firm filed a lawsuit in July, claiming the tax violates a constitutional provision that requires the Legislature to get voter approval before imposing an income tax, according to a report in the Austin American-Statesman.

The case hinges on whether the margins tax -- implemented in 2006 as part of the court-ordered school finance fix -- constitutes an income tax when applied to certain business partnerships.

The tax is a major source of funding for public education.

The law includes a provision that any legal challenges to the law would go straight to the Texas Supreme Court.