### THEA~~~ORNEY GENEKAL
OF%.-EXAS

Honorable Geo. H. Sheppard Comptroller ofPublic Accounts Austin, Texas

Dear Sir: Opinion No. O-762

Re: pCiFt$nc;s under A,,ticle7047,

. . . ,where the State of Texas levies an annual occupation tax at a certain rate, due and payable in each and every county inwhich the occupation is pursued, inwhat amount andmanner should the County.tax of such occupation be luvied and collected?

In answering theabove question embodied inyour letter ofMay 8, 1939,cave

quote from said letter as follows:
"Chapter 212, Acts ofthe Regular Session of the42nd Legislature, provides that all occupation taxes are payable in advance unless otherwise provided by law, and establishes anuniform expiration date as of December 31st of each year, thereby making itnecessary topro rate the'collection of such taxes from thetime the occupation commences tothe end of the calendar year.

"In opinions written by Grady Chandler January 5, 

### 1928, Clark C. Wren June 

### 29, 1936,John McKay February 27, 

### 1937, and a joint opinion by John McKay and ,J..H.Broadhurst March 23, 

### 1937, itwas held that Article 7047, R.C.S., must be read in connection with Article 7048, R.C.S., the last named Article providing that State occupation taxes cannot be collected for less than one quarter. These opinions consequently hold that the occupation tax must be collected from the beginning of thecalendar quarter in which suchbusiness
commences to th? end of thecalendar yearand not from theday the occupation commences.

"Wehave recently had severalirequests from County TsXAssessor Collectors for a ruling as to the proper procedure in collecting the counties' part of such occupation taxes... .

Hon. Geo. H. Sheppard, Page 2,

### O-782

"The Constitution ofTexas provides that counties and cities may levy and collect one-half the anount of the occupation taxes levied by the State. The county commissioners ofthe various counties usually enact ablanket levy imposing a ccunty tax one-half of the State taxupon all occupations on which the State has ,imposeda tax.

The first question, however, must pertain to the State tax. The Statutes provide that some of the State occupation taxes are due andpayable in each countywhere the occupation ispursued. As anexample the Occupation Tax on carnivals (Art. 7047, Subdivision 2sb)reads as follows:
"(b) Carnivals -- From every carnival, an annual tax of One Hundred Dollars ($lOO.OO), which State tax shallbe due and payable in each and every county in which such carnival shows or exhibits.' ,,,

"A carnival rarely ever shows longer than aweek ortwo weeks in any one county, yet if the tax is tobe prorated (as provided in Subdivision 42, Art. 7C47), itmust pay $100.00 per county.in the counties it shows during January;*February andMarch, but inApril, May and June, it would only be required topay $75.00 for each ccuntg inwhich itperforms. In the next qarter the taxwould be $50.00 per county and in the last quarter f25.00 per county. It appears that the Legislature merely intended to establish auniform expiration date for occupation taxes but in a case ofthis kind, ithas the effect of reducing the tax.
"The first question therefore is as follows:

Where the Statute fixes an annualtax and then provides it is duesandpayable in each and every county where the occupation is pursued, was it the intent pf the Legislature that the full amount of the State annual.tax be collected in each county, or was it intended that the taxbe prorated from the quarter the occupation commences in each county to the end of the calendar year?

"If you hold that the State tax on acarnival and other occupations payable in eachcounty separately is not subject toproration, will the counties collect onehalf of the full levy, or will such cmilties b$.~comell.ed,tocof'fectfOF'Une~quart& only
asprovided in Article'70E8,::,R.C.S.? ._ . ..

,, >~~* "Conversely, ifyou hold that the State tax on such carnival or other occupations which pay separately in each county maybe prorated as other occupationstaxe$#,willthe counties collectEon. Geo. H. Sheppard, Page 3, O-782

one-fourth of one-half of the amount lev'iedfor afull year, or will such counties collect one-fourth of one-half of the prcrated amount the Sttte collects. In other words, letus say ,I the occupation commences in July and the State collects $50.00 the pro rata psrt of the last two quarters of the calendar year. v/illthe counties collect one-fourth of one-half of $>'O.OOor onerfourth of one-half of $lOO.OO?"

;iefind no authorities toassist us in arriving at a correct interpretation of the tax measure involved in your inquiry, butfrom the opinions adverted to inyour letter and the pertinent constitutional and statutory provisions, we are of the opinion that itwas not the intent of the Legislature that thefull amount of the State annual occupation tax be collected in eachcounty @here the oc~cupationis~pursued, regardless of the time during the calendar year when~the occupation commenced, but, on the contrary, suchtax should be prorated from the quiirterthe occupation actually~commences in each county tothe end ofthe calenda: year. Thishas been the consistent ruling of this Department in the opinions.cited by you where the occppation tax is levied by Article 7047, Revised Civil Statutes, annually, on a state-wide basis only, andwe find nothing in this tax statute or any ofthe other pertinent statutes whichnould disallow the benefits of aproration on thebasis ofthe time the occupation was actually pursued during any calendar Article 7047, Revised Civil ye%;,:", those instances under

,where amore burdensome occupation tax islevied by the State, due andpayable in each and every countywhere such occupation isfollowed.

Our answer toyour first westion renders unnecessary an answer toyour second, and we accordingly pass to a consideration of your third and last question, involving the amount andmanner of the collection by counties of occupation taxes in those instances where the annual occuaption tax levied by Article 7047, Revised Civil Statutes, is due andpayable in each county on apro rata basis from theb eginning of any quarter inwhich the occupation commences to the end ofthe calendar year.

In this connection, Section 1,Article 8, Constitution ofTexas provides, inpart, as follows:

"And provided further that the occupationtax levied by any county, city ortown for anyyear onpersons or corporations pursuing any profession or business, shall not exceed one-half of the tax levied by the State for the same period on suchprofession or business,"Hon. Geo. H. Sheppard, Page 4, 

### o-782

From the foregoing constitutional limitation upon the amount of occupation taxes which maybe levied by.the counties of this State, it is our conclusion that the .amount'ofthe annual **OC** cupation tax levied by Article 

### 7047,hevised Civil Statutes, rather than the amount actually collected by the State fromany given occupaticn, isde%erminative of the amount of occupation tax which maybe constituticnally levied upon such occupation by any county. Civil Statutes, Us!ng subdivison 2.5b,Article .7047,Revised

of this point, mentioned inyour letter, asan illustration

webelieve that the amount of county occupation tax fixed and allowed by the Constitution of Texas would be one-half of the annualtax rate cf $100.00 on carnivals, rather than one-half of such amount asmight actuallybe collected from any givenc arnival in any certain year byreason of its exhibition in several counties of Texas. The latter figure would be variable withe achyear and each carnival, sndthe conwissionersl court, in levying the county occupation tax, would beunable ther~efromto levy suchtax at the beginning of the calendar year in any definite sum. For these reasons webelieve the basic annual tax fixed bythe Legislature in the various subdivisions of Article 

### 7047,Revised Civil btatutes, is controlling in calculating the allowable county'occupation tax rate cn anyparticular occupation.

Inasmuch as, under the statutes governing the collection of county occupation taxes, and the opinions of t'nisDepartment constraing same, suchtaxes maybe paid quarterly basis, it would follow,fkom the loregoing, that counties would, on a quarterly basis, collect an occupation tax of one-fourth of one-half of the amount levied by the State for afull year'on anygiven occupation. Using the illustration given by you in your last question, and assuming that a certain occupation
commences in Julyand the State of Texas collects $SO.CO, the pro rata part of annual tax of $100.00 for the last two quarters ofthe calendar year, it is our answer that the county occupation taxupon the same occupation for one quarter of the calendar year would be one-fourth of one-hal~fof $100.00 rather than one-fourth of one-half of $50.00. Trusting that the foregoing fully answers your inquiries,
we are
ATTORNEYGENF& OF TEXAS Yoursver truly ~/!..pc&hI.

Nef'f,~ Jr.
PMN:N/cg BY Pat M. Neff, Jr. Assistant APPROVED JUNE 

### 23, 1939 S.Gerald~C. Mann ATTORNEY GENERAL OFTEXAS Approved Opinion Committee By BW, Chairman