Texas City’s “Fee” Struck Down as Impermissible, Tax and Attorney’s Fees Awarded

Short summary

A Texas appellate court struck down El Paso's solid waste franchise fee as an impermissible tax, finding the city raised revenue far exceeding regulatory costs and diverted funds to unrelated expenses like police and fire department equipment. The court affirmed awards of actual damages and attorney's fees to the plaintiff, noting he paid the fee under duress due to criminal penalties for nonpayment. The case signals that Texas courts will scrutinize local fees that function as disguised taxes.

• •Texas appellate court rules El Paso's franchise fee was an impermissible tax raising excess revenue
• •City diverted fee revenue to unrelated expenses including police and fire department equipment
• •Court affirms attorney's fees and damages award, noting taxpayer paid under duress

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