In groundbreaking news, the Texas Third Court of Appeals has withdrawn its earlier opinion and issued a new opinion in the Hegar v. El Paso Electric Co. case. In the case, which has attracted widespread attention, El Paso Electric filed a refund claim with the Texas Comptroller for sales taxes that it had paid on transactions involving “telemetry units that are related to step down transformers,” which are pieces of equipment used to transmit electricity. In its initial redetermination request, which is required in Texas to challenge a denied refund claim, El Paso Electric cited the Texas sales tax manufacturing exemption as one of its grounds for challenging the refund denial. Specifically, El Paso Electric cited Texas Tax Code section 151.318(a)(4), which includes the term “telemetry units that are related to the step-down transformers” among a list of around fifty different items that are exempt from sales tax when used as part of the manufacturing process in Texas. The Texas Comptroller argued that, because El Paso Electric did not explicitly tie the telemetry units related to step-down transformers directly to the code section citation, El Paso Electric was barred from raising those claims during its administrative hearing. The administrative law judge agreed and overruled El Paso Electric’s claim that its telemetry units were exempt under Texas Tax Code section 151.318(a)(4). El Paso Electric then sued in Texas District Court, which overruled the administrative law judge and granted El Paso Electric’s refund claim. The Texas Comptroller later appealed, and the Texas Third Court of Appeals once again overturned the district court, ruling for the Texas Comptroller. This latest opinion withdraws the earlier Third Court of Appeals opinion and issues a new opinion.