The Tyler Court of Appeals has reversed a trial court order dismissing a taxpayer’s common law declaratory judgment claim on the basis of governmental immunity.
Oncor Electric Delivery Company NTU, LLC v. Smith County Tax Assessor-Collector, et al. (No.12-25-00282-CV; October 14, 2026) arose from a dispute between Oncor and several taxing units in Smith County. For the 2022 tax year, Oncor received property tax statements from the taxing units totaling more than $4.7 million. The day before the delinquency date (1/1/23), Dallas US Postal Service locations were largely closed by a winter storm. Oncor found one, however, and deposited the checks with the sole employee present for the full amount. But for some reason, USPS delayed delivery to Smith County.
The Smith County assessor-collector deemed Oncor in default and applied Oncor’s payment first to P & I and then to the taxes owed. The taxing units then issued new tax statements leaving a balance of tax owed to the tune of almost $400,000, including more P & I. Oncor paid the bill under protest and submitted an application for a refund. Smith County refused. Oncor filed suit. In response, Smith County and the taxing units filed pleas to the jurisdiction, which the trial court denied with prejudice. Oncor appealed, asserting no waiver of immunity and declaratory judgment.
In an opinion by Chief Justice Worthen, the court of appeals reversed and remanded. Smith County and the taxing units argued that Oncor’s claims didn’t demonstrate a waiver of governmental immunity under § 31.11, Tax Code. That statute provides that if a taxpayer files a refund request for an overpayment or erroneous payment of taxes, the collector for the taxing unit must determine whether the payment was erroneous or excessive, subject to agreement by the auditor. If they agree, the collector shall issue a refund. If the collector denies the refund, the taxpayer has 60 days to file suit in district court. § 31.11(a), (k). Oncor contended that timely paid taxes and was entitled to a refund for unlawfully charged P & I. But as the court pointed out, the statute speaks only to a refund of taxes, not penalties and interest. Consequently, Oncor didn’t plead facts showing that its claim fell within the scope of the statutory waiver of immunity.
Turning to Oncor’s common law claim for equitable relief pursuant to a declaratory judgment action, the court observed that governmental immunity doesn’t apply if the claim seeks “a refund of illegally collected taxpayments made as a result of fraud, mutual mistake of fact, or duress, whether express or implied” (citations omitted). Oncor conceded that it didn’t make this common law argument in the trial court but did plead that it paid its 2022 taxes timely, the taxing units had no lawful basis for charging P & I, it paid the additional amount under protest, and it sought a refund for the allegedly illegal tax payments. Oncor insisted that it make its tax payment on the delinquency date when its employee deposited at the post office in a postage-paid envelope.
This was enough for the court. Although Oncor couldn’t rely on the statutory waiver, the trial court erred in granting the taxing units’ plea to the jurisdiction on the common law declaratory judgment claim. “Because the pleadings do not affirmatively demonstrate an incurable jurisdictional defect,” the court ruled, “Oncor should be afforded the opportunity to amend its pleadings.” Oncor also made constitutional claims, but the court didn’t need to reach them because the statute didn’t figure in the decision.
