OFFICE OF THE AlTORNEY **GENERAL** OF TEXAS AUSTIN

HonorableGeorge Xi.Sheppard Comptrollerof Publia Aaoountrr Austin, Texas
Dear Sir:

on the r0ii0dng;

tion at that -8evonthL perr0rm the oaring 80 aoi&fxe the formason in thlcr

State ongaged in the budnor rurioe or partormi~gkayduty for othenl (~1'01: oompenration,

dth the nra of any llefioe,

tool8, inetrumentcl or equipmenti,

slaotrioal, meahanloal,or atherwlao, **or by**  meaM **et q**  ehemloal slsatrloal,



### or meohanlaal

### p~)oers, I&W! auoh ae%~l6e 18 performed in oonnootion ti8h the osla@&tiBg of the 

### oc~ine seat of any ~$1 or gas well a the rhootl.+g 

### or aoi8ising the formationsof nuoh well8 or the surveying

### or CastiM of the samb or other formationa of the Wth in ant muohEonorablaGeorge H. Shoppub, p0ge 2

011 br gas wella, ahall rapport 0~1 thp 20th 02 saoh lPonth and pag to the Comptroller, at his ~offioe

in Austin, Tuaa, 0n ooonpatl6.u

tu equal to t- md tyo-tsntha (2.2)pa oant of the grqaa amount rotpite4 rrom aald,srrtioeturniahed or datg'periormed, during the oalendarmonth nut preoediag. The aald report ahall be ueouted under oath on a form preagrlbed and turnlahed by the Comptroller,* ,I,,

hel& that wthla la a tu on ~errloe ." (SoaAttorn (hnudL*a Op! Q.) liiii The psraona~tu0tPare thoar

of the aaaln% art

0 or other iornatlormof the earth ti w.auoh 011 or gas wolla."

It. la 0le0r that it 0ny &at& prrioiW:any .ot atid oprlr~tlona, %owl~, 

### oemuitln g or thc.'o*aing 

### l

a a,î ~ ahe otlag,î %oldlring;w ~~aofceyIcLg* or %~aOinl,l.and oolleetamoney theraror, 8aid~Rpon aa io+fz&+a-& 5 liability i0r the tug ,a@, r, **bdleve** it la al.80

aleai- that~ I? a p0raon prriorma ago other operation, uhloh oonafltutasa aerv100, that la "in oenneotlan with" me of aald named o$e5atlonrauoh l ertlor la bk~ao ta.xablo.Ia oth0r worda,an operatloq,doag not hara to 30 one or tha, mmed aprratlona 

## to be taubls,~but':it ii taxeble ii it ii moroll~ 

### *pertorre@h the ncuaed

oporatlona. oonneotlon

wlth*'a broad yha oourta s

lntor retiatldh.* Kokuaai Klaen KabuahiklUleha T.~ Colunbla Bteyedacr

%g 60.~,

23 Fed. Supp. 403. We be$lers that any l m l o r,t ht

1s perfozmod aa a neoeaatigatop;towardthe prrfomoi of or in fulfillment **OS,** a partloular**o sratlpm**  **would bs**  oonaldero&a8 ba$ng **dono** 'in oonneotlen

wit'* riaid partioularoperation. ii In the oaae of Ra br ld Oorporatlonof Oluater t. Rlahazdaon, (Sup. Ct. of F&.)'l&lngo. 113, the oourt said:

"In the oam ncRT

beior0ttbe00urt, tha rdtk 0n which 'plaintifi

ia shuvn to hare be&n employed,and pormlt80dOr aufrrred to eagags in, waa the proourtiento? al upplr of raw materiel for the operation oi.doten~ant~a 8awmlJ.l. That work of that **kind** la to **ba** aonatrwd aa work 'a oonneotlon

with' any nil1 ia fullp a@talnod by the authariI ltho &h,0uobwork waa note @otuallydone ia the ril.l lttyor Gthln the ourt~lla&e theraof,~

P .* (Unduaoorlngt, i

,Eonarabla

Gaorga H. Shappard,pa&e 3

ii **YOU?** firat Question **depmda** on the moaain~'~ **tha** hraaa win oonnootion w1hn.F In Attorney hneral’a Opinion P. 0-36Tt, v, we held that *perrarating,w as that oparatian la ?rdInarilg one and understood, doaa nofpeonatituta*ahoat and we also hold in *hat opinion, and wa noW hold, that the 83 '~ 1' in questiondoes not a pertorator,w bu% that I! ply to the ordinaryuse of a ameaha&aal t would apply it a Q~aohaniaal perforator* was used "Id oonaeotlon with? One of the taxable oparatlona. X.bda? what was aald in that Opinion,we 'ballera the aama ao would apply to *sun ~per?oiNtora * No Pddrratandthat ordiaully perforatingths aaaing la not d&q In a9nneotlF with a taxabla o Ii eratlon, t but la dona dalg for tha purpose or making hol@:r- la a easing so that the.011 already thera nil1 flow ,lnto the wall1 but, aomatlmaaparSoratIng1s gone in oonneotion with a tuabla operation.(‘See .*Pstrolewa Produotlan
**, ”**  **by** Wilbur F. Cloud 1937, paga 388; WELamanta~of th,a Potrolawa **ladaatr~,*~edltad** **by i.**  **~8 Golyar,**  1940, page 229;,:-*,Vse of Oartiddt

ifall Coraplation

Y&Ma,* by **George** Webor; O~l~a:GaaJournal (Maroh17, 1938); and *Drllllng Oar Journal

the atatuta. III

the aaao you aek **about** the aarrloo of parforat%ain(r the oaaipg Ed **dqne,**as a nrwaaary utop .toward thd pu$armanoo o$

, aoldlzfng~tha.~~tlon.~..~,Xn fa,ot tha operatorhad the parioratlng **ddno** In or#or to .qoldlae eatthat 1~01, and, from what fou have adrlaad UN, w*,

**uudrratand that**  **this** putloular **parfOrmn&** j@b was **graparitorp $0**  aold~ilng. we think th8 work 8s **perforating** the aaalng In this aa8a waa&ne "ln ~oonuaotlon with" aoldlaiag tha rccmatlon,tiloh Ia,a taxable operatim. **Tharofore,** our ,$ anawar to your first question Iu that la the **partleuhu** oaaa rat, deabribe and ask about the work of psrfaafing tha oulag 'E,.la a taxable aenloe.

Ua wl.ll~now~oonaldar your asa& quadlon,'whIah aani oerna tho use of a gun parrarator in an opa.hole. .Wa undaratand i that the gun pelTorator is lrrere4 iato tha wall to a lava1 balw .,:- .~i the oaalng and that bullets are tired $nto the farmatlonfor the purpose of breaking us the sandstone, limaatan~Or at&r **ubatanoe** and opallngpaaaagoa n the f ornation so as to stimulate the flaw 41 011 into the wall.

Aa heretofore IndIaabed,we believe that when l meahmloal perforatoror a gpn perforator la used ln 108 ordinary

### mannor, not In aonneotlon

with a named taxable oporatlon,auoh a aerrioo la pot taxable. The ordinarywnner of p eratinga maohenlaal perforatoror a gun pertarator is to use 9t ln euttlng,pun+rug of ahootlngholes In a oaalng so that 011 outalda the oaalzq atHonorablyQeorge H. shoppaml,pago 4

that lore1 aan flow through raid holer into the wall. Wo ara advised that the use of a gun parSOratorIn an opa&??holo la very unusual. In Attornaj @aneral'aOpinionHo. o-3627, we quoted from Vundamentala of the Petrolsum Industry,* Dorsey 

### Hager, 1939, at page 235, as SOllows:

"ShootingaooomplIaheaaaveralpur oaaa, apsolflaally,lt '1. Breaks up the sandstonesar 1L aatone@, oaualng ohannala to 

## itim.

"2. Opens passages to fracture zones or to joint plaui)~, in whloh 011 may oaour. "3. Forma a larger ool.loolsl.ng area.

“4. Createsmore seep-e apeoa in the hole. It throz ahanuels into the well.?

Ozeates a vaau@mthat suoka l?,the oil, starting

In that opinionwe duo quoted rraa the oaae of Texas Qamlto Oil ~ompw **T.** ~illiarrm, **199 ag.**  **~6,** 250 S.W. 818, as rouorar

"It 1s a matter of ooamon knowledge that the ahoot5ag of 'anoil well la aona alwaia at a tia!e when tha wa&l la at or near oompletlon,**or** when the oil rand has been **ruehad;** tha purpogabeing to looaeu the formttlon to tha **and that**  the flor.or 011 MY **be lnoreaamd.w.** 
**We** ballera that by the ume of a gun perforator in an op+ hole, whereby bullets are **fired into**  the formation, It aarrea’t **Tudor** the 

### trrau of the statute *ah: **#** pupr: Exl~~~:~~:lo. lnp Our **anawer to**  **four** aeoaud qwad **ibn** 18, that the firrag or bullota Into tha formatianor M oput hole at a ~lerel

below the oaring Is a taxable aerrloa.
We hope that the SoregoInghaa answeradpour quaatlma. Your0 

### rorf ~4Aly
ATTORNEY Gl!X.BRAL OF TKXtW

. APF’ROVED AUG?, 19&l ,(slgned)

GROVER SEILWS d) ““ILC;lGl~Zl Fir& Assistant Attorney General

APPROVED OPIRION COMMITTEE By B.C. Ghalrmau O.K. G.R.D.