gonorab1.e Gee. 

coag3t2olltir of 

m&R, Taxan 

pIIsr sir: 

OFFICE OF THE ATTORNEY GENERAL _ OF TEXAS 

EL shepperd 

Publio looounts 

at&of’ B des%h. The trullt 

, amaw Ln Tami, rttaokti an6 

atocico 8ria bond8 kr eorpor#iiona 

E than Tmum, Unitad tstatqr Umvmrxaenf 

‘bonds, nrunioQal bwiA# OS olti.8 ouQountr) bonda, an& a debt 6&e the s~tak 

utsida OS I’(IZ(LIJ. Thi rwt:r2cster or 

xoept acme of the Twarr reouritier) wwa 

ofmseloa of R bmk in wt Pork ror oonuetlwh.3~ th8 bhet0nOe tax rOp0rt rap the chde8 a. 

Jonss estate was filed recently, ths stocka wad bon&? of eorporatlons organl%e& in mteter other thm To%&4 United t3tatss 

Uovermwnt BoMs, Fw3em1~ Land Bmlc bonda, a&oipal bon& of 

cities outside of Texas, forsign oountry bar&a, on6 thhe debt 

due the estate by 6. dubtar reaidfui; outetao of Texmi wafo 

OrPitted fran the ~rpert. 
gomrable Qco. K. Sheppsrd - Pa&o 2 

Your dqmrtunt haa taken the riolr that Chsrlm Hf. 

Jonas* rntlrb 5 par cent intcirat ia the Korgsn Jone~ satats 

is subj4ot to in.&wrItanoe tax, rqywdless of tha QomIoIle OS 

tbtl corporation whlah Issued tba bonds and stooks, and cogsr6lers or tko physIoa1 Aoobtion of tha certllIoatsa or other 

svidanous of ownership, UUQ you roqueet our 0&85on whsther 

t&l8 poeition 1~ sorrtli9t. 

The rd.mhg la witi portlmnl portion or Art1010 

7117, v. a* c. 3.8 

*all projmrty within th* jurIs6Iutioa or thin 

st8to. real or personal. oocpornts of incorporats, 

and any intsrrat thuxoln, . . . . whetbar balonIckrg 

?a lRhRbltRnts Of thi8 f.itat* or Eo rsonr who axe 

not inbsbitanto 

is l0o*ted ni do 

ra&ardlasL Of whe tr @r such proper 

or without thIr state, whIoh ash 3 

~88 abrolutsly or in tru&t by will or by the lam 

of do8oant or dlotributlon . . . l &m&l, upfm pa+ 

ofnc; to or ror the wo of any por80u, corpoxatlon, 

or ar8ooIattoa, ba mbjeot to I tax. . . . u 

The question of Jur5sbiotioR to tax pa%&rty, both 

tangible anil intnn&blo, h8r been tha aubJa@t of #uoh &tmous8iw by tho oouxts, md irm t5aa to tba tic prdros 00 

wh%oh auoh Jurladlotiim mya baa.8 hate been ohmgod. WmUy, 

la ourxy 1. MoCanlos8 (1939) 307 Lr. s* 357, 63 L. Bd. 1339, 

59 3. Ot. 900, 123 A. L. il. i62, jurisdlotlon to tax lanfl, 

tenglbla parumlty and lntaneibls 

r 

rsonalty was pleoed 

rpuerely on ths prataation or banaf t throry of taxation es 

oorrelated with the oontrol of the laws of the psrtioular 

statu ovur th0 thine ox prr8on taxed. 

In Curry T. &ooCrnlom, dooedunt, a rosidant of Tonnwmm,. tranrrerred oartain stoek8 anC bonde to ‘an Alabama 

trust oorporation by truet Sndeatun, rssclrving the inoarrul 

for Use, tnu powrrr to rimovo the tru#Eae and substltuts snOther, the power to dirooc sale and investment of tha trwt 

P 

ropwty, crnd the powsr to dispose Of the truet Bststs by hmr 

ast will. anC tcrstamant. tint51 d%%%dmt’% death the srldencnr 

Or the intmeiblwa wwre losetafi 51i iU.sbsnui sod thti trust oarporatfw edmb5aterud tkio trust tn that stat%. nt her death, 

dsoctdent urrrrclaisd the reevrved power or +smt&wntorg dispo~+ 

tiOA, kad bequenthed the LnrPt &TQ&W?tY to thu Sami trustsct, 

555 i. 
J but ohangQ(L W&i original trust indmtura a8 to awunte end eatutaa. 

Deodsnt S'urther aypolntcra T~a~888Qa and Alabaa@ trust c~mpanioa 

&cutorU as to the propaftioa whioh ahe might own anb havetbe 

right to Cuapoao of by will k ths rtrrpwatlva atate&. The exQwtore brou&t suit i&the ohanaery eowt of Tenneaau agalnati the 

to% oftiolal8 or Rlabama tad Te.mes8ee Draglng for a Qaalaretorg 

ju~nt to 4eteiaUs the portl(3ae of the artate taxabl+ by the 

napaotfvo atat88. 

m0 8th WU.Xk th88RUa that the dU8 p~008~ 0~8U88, 

au t40wbrutta by pcerloua 0asea in the aupw* Court (rarmr8 

tazlng thu trumfer and that ON or t&e ethw ha& to be aaloatd 

sr tha l ltua of.th8 intan&blra. Tha &%pruae Court, tn u1 

oplnlon by 36#u held Ohat botkA1abppI and Tonnaasor had 

~urlaaioblQn, utlL5wl bg PUB pxQcrrr, to l8pQre a cloa6h 68x 

OR traRarar or 6h4 tnt4la&1b198. airtrbi001Qn 60 68x W&8 *@aa 

M the p;poteotiM or budit theory. Hawmrar, tan(blblo an4 intanglbla porsaralty uery 4iotlngulahad 0.0 the gxound that in 

the oeae or the forrscrr oontrol oopld b8 8xwtad 0181: am3 proto o tiQn l isorQra to the pbpaleal alJag, uhm.8 * the oaae 0r 

the latter the aourt aaid (307 U. 6. at 369)~: 

“Vw?g U!ferbnL couddoratlona, both th~oretloal 

.a& praotlomi, app4 to tblv tautlon or lntas&blerr, 

that &a, rights whloh are not rrlabo4 to phyalraf 

thinji. Swh rlghtr UF* but relatlctaaU~a batwean 

pa~~ona, na6ural or uo+arat%, u&&oh the 1mu ,raooqnine8 by attaohix~g to t&a,nr oortala maotiono canfoteal b & in owrta. Tha gowar of ~ovammant Qvlr thea 

and rho proteotfon whioh lt slvaa thoa ouaad~~, bo 

rxartml throw oQxitro1 of a phyalwl thing. They 

ma ba made effrotivc only thxoggh oontrol QVW and 

pxot@otlon affor4od to thoaa pereoaa whoa% relationf&i&t@ are tha origin of t&m ri@ha . . . . 

* . l . . 

*& ir e, for r esa o na o f her a wn 

althou@ &mleLleB ia Tonnsaaer a 

the teatstrir, 

en l ~joy&g bhe 

benerita Qt it8 1~8~8, found it 84vantegcow to orsat 

a trust of lutanglblua Ln ldd+ama by veaLlag legal 
01th to the $ra$a&dblea end limiteb pOwern Ot oontrol over them In ~lsbsnra. But she alw provi&trd 

t&it by resort to her powar ‘to dl~rpoau @f proprilrty 

by nlll, conferred ;?DOU hur by the li:w of tha &ml.- 

atle, tii~ truss% cou.l.8 br;bem.inated mih the proptrrty 

pit88 uafir tka will. she thus oreated Lwo cuts of 

lag81 rolatloP&hlpa reaultiry; tii dlatlnat. lnteqlble 

.i&hto, the QDB oabodiad in tha lee1 ornwrrhip by 

the Alabama trustee of the intangfblrs, the other 

omboalbd iA the opuitabla right Of tha abObd8nt ta 

oontrol the notion or the truatee alth rriepeot to 

the trust property and to oompd it to pay over to 

her the irlooes aura her iirc, and in her power 

to Qlspoao of the property at Qoath. 

" . . . . 

“&he naoss*erlLy invoked the crld or the law Or' 

both atates, ani¶ hor logateoe, before thay 0~1 aoIour8 

Ona @55Qy thb benefit8 Of 8UOOb88iQR~ 0Wt bVOk6 ths 

law Of bat&." 

It la evldant that the L.cgal ownership of t&e AI.80 

bai!ka truakt, we0 baffiolant to Jurtlry th8 impQrition of,a 

train that atata.~ ~bven under the old ,idra Qf loealielng of 

ixsta~&bl#lr, it met be oonosd~Q, an did Butlar in hi8 din&ant, 

that Alabaa ha& thr $irisdiotlon to tar on the bsaia of 

*buaineaa aitua.w 

A si.mlhar rituatlok *au prsafmta~ in Qravbs vc islllott, 

307 u. 6. 383, 83 L. &CL 1356, $9 ii. ct. 913, and the JiirlsdiotiM Of the St6k *rhiQh W&8 talc slitUe Of thtt tl%Qt, tO,taZ 

wan beyond gwatl~n. 50 ala0 la rr dam of prfaprty taxi 3928 

Dttpoalc an& Tru8t Co. VI Ylrc;.icls, 280 LT. S. 83, 74 L+ &I. 76, 

$6. 

Y. ct. 59, 67 X. 3.. it. 386, &a al8.0: 18 Taxen Law Acavkw 

The QsOtWtion, btnofit alid OORtTOl theory Of taXatlou of htwglblea was reafrirawd by tiha Lupraew Court in 

&t&o TQX Coliwisaion of Utah v. ~xldrlch, 316 U. j. 174, $6 l.. 

id. 1358, 62 3. dt. 1008. 

$0 here, Chrrrlae 11. Jowe* lntc;rest in thy Wrgan 

Jwirro truet is taxab1s under aithar theory. Thhe truut 0~s 

its exiatanocr to th-i law3 of t&r: stat6 0P T~omm. T6x6a law 

t