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February 20, 1952
Hon. Robert S. Calvert ~~ Opinion No. V-1408 Comptroller ofPublic Accounts Austin, Texas Re: Applicability of gross receipts taxes to air~express **revenues** received by Railway Express Agency, Inc., Dear Mr. Calvert: under the submitted facts.

You request the opinion ofthis office upon the question presented in**your** letter ofJanuary 23, 1952, as follows:

“Article 7058, V.C.S. reads inpart as follows: *‘Each individual, company, association or : corporation doing an express business by steam railroad or by water inthis State shall make, quarterly, onthe first days ofJanuary, April, July and October ofeach year, a report to the Comptroller, under oath ofthe individual or ofthe president, **treasurer or**  superintendent of such company, association or corporation, showing the gross amount received from intrastate business done within this State inthe payment of charges from express and freights, or from other sources ofrevenues received from intrastate business during the quarter next preceding.’

“I am enclosing copy ofAir Express Agreement between Railway Express Agency, Inc. and the various air **lines** ~4th which they dobusiness.

“Please advise me ifthe air expres~s revenue received by Railway Express Agency, Inc.. under the terms ofthe agreement, is taxable under the provisions ofArticle 7058, V.C.S.” With your opinion request you submit for **our** examination a contract form behveen Railway Express Agency, Ipcorporated, and the air line company referred to in the contract as “Air Company, *which covers the contract or agreement between the express company and the air company with respect to the undertaking **on** the part ofthe air company to transport by air shipments ofthe express company. This contract is lengthy and somewhat involved, but it is sufficient to say that the air companyHon. Robert S. Calvert, Page 2 (V-1408)

undertakes inbehalf ofthe express company to perform by air express a certain part of the transportation ofthe shipments contemplated by the contract. The express shipments involved begin and endwith the express company, the air company performing the intervening transportation.

Article 7058, V.C.S., tevies a gross receipts tax on express companies carrying onbusiness *by steam railroad” and requires such express companies tofile h4th the State Comptroller onthe first day of January, April, July and October areport “showing the gross amount received from intrastate business done within this State inthe payment ofcharges from express andfreinhts, or from other sources ofrevenues received from intrastate business during the quarter next preceding.” 1 At the same time such companies shall pay tothe -SE **Itereasurer** -an occupation tax” for the succeeding quarter
“equal toTwo and One-half (2:s) Per Cent of said gross receipts” as shown by the report.

Specifically, **‘ your**  question involves the receipts by the express company derived from that part of the transportation performed by the air company.

Article 7058 **was** amended by House Bill 648, Acts 42nd Leg., R.S. 1931, ch. 222, p. 376; and certain changes were then made to the original act. The word Usteam” was added; so the act, as amended, applies to express companies doing an express business by steam railroad instead ofby railroad as was provided in the original act. The following was also added: *

. *
.or from other **sources** of revenues received from intrastate business during the quarter next preceding.” The only other change made by the amendment to the original act was to provide for quarterly payments instead ofannual payments. We find upon examination of the emergency **clause** to this amended act a clear expression **of** the legislative intent. Itreads:

“The fact that itwill be beneficial tothe revenues ofthe State tohave express companies pay a quarterly tax in **lieu** ofan annual tax, and the further need ofamending the statutes so as tomake same apply to express business done on other carriers than steam rai roa s, . . . We are here primarily concerned with the following expression appearing inthe body ofthe act and constituting a

1Emphasis added throughout.. . : Hon. Robert S. Calvert, Page 3 (V-1408)

part ofthe amendment: *
. . , or from other sources ofrevenues received from intrastate business during the quarter next preceding.” This phrase, construed in connection with the express purpose as stated in the emergency clause, leads to the : conclusion that the receipts from such air line transportation is subject tothe tax. Inbrie&; the purpose ofthe amendment was to impose the tax not only upon the receipts from that part of thebusiness done by the steam railroads, but also upon other sources ofrevenue derived from express business done by other carriers for and inbehalf ofthe express company.
SUMMARY An express company is subject to the gross receipts tax imposed byArticle 7058, V.C.S., on that part ofits receipts arising from transportation offreight by the air lines inbehalf ofthe express company. **Yours very**  **truly,** PRICE DANIEL Attorney General
APPROVED: W. V. Geppert Taxation Division Mary Kate Wall Reviewing Assistant Charles D. Mathews First Assistant 

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