THE ATTOWSET GENERAL OF TEXAS

March 1, 1988

HonorableRalph R. Wallace, III OpinionNo. JW- 865 Committee on Cultural and HistoricalResources Re: Authority of a county House of Representatives or city to grant exempP. 0. Box 2910 tions from the hotel/ Austin, Texas 78769 motel occupancy tax to certain religious, charitable and educational organizations (RQ-1294)

Dear RepresentativeWallace:
Chapter 156 of the Tax Code imposes a hotel occupancy tax, leviedby the state, "on a person who, under a lease, cohcession,permit, right of access, license,contract, or agreement,pays for the use or possession or for the right to the use or possession of a room or space in a hotel costing $2 or more each day." Tax Code, 5156.051(a). Section 156.102 of the Tax Code provides for an "exception" from the tax for a non-profit corporation or association "organized and operated exclusively for a religious,charitable, or educationalpurpose." Chapter 352 of the Tax Code (previously codified as article 23726-8, V.T.C.S.) permits certain specified counties likewise to imposeby order or resolution of the commissioners court a county hotel occupancy tax. Chapter 351 of the Tax Code (previouslycodified as article 12695-4.1, V.T.C.S.) likewise permits a municipality to impose by ordinance a municipal hotel occupancy tax. Neither chapter 351 nor chapter 352mentions any "exception" to- ~the tax for non-profit corporations or associations "organized and operated exclusively for a religious, charitable,or educationalpurpose." You ask:

Do counties and home rule cities under [chapter352 of the Tax Code] and [chapter 351 of the Tax Code] have the authority to grant exemptions from the hotel/motel occupancy tax to entities such as religious, charitable and educational organizations, other than the 30-day exemption in the

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[alct,without specific language in the law granting such authority?

The "30-dayexemptionItto which you refer is found in sections 156.102, 351.002(c), and 352.002(c) of the Tax Code, which "excepts" from the reach of the state tax, the municipal tax, and the county tax, respectively, a person who has the right to use or possess a room in a hotel for at least 30 consecutivedays: We do not understand you to ask whether the aforementioned 30-day tax **exceptions" are constitutional:accordingly, we will not address that issue. We understandyou to ask onlywhether a county or a home-rule citymay grant *'exceptionsql for religious, charitable, or educational associationsabsent statutory authority. We answer your question in the negative; counties and home rule cities may not grant such 'exceptions"without specific statutory authority.

ArticleVIII, section 1, of the Texas Constitution
now designates three types of taxes that the legislature may levy: taxes. property taxes, occupation taxes, and inc;;;

Additionally, articleVIII, section 17, of Texas Constitutionprovides: ?

The specification of the objects and subjects of taxation shall not deprive the Legislatureof the power to require other subjectsor objects to be taxed in such
manner as mav be consistent with the princioles of taxation fixed in this Constitution. (Emphasisadded.)

InAmerican Transfer & Storaae Co. v. Bullock, 525 S.W.2d 918 (Tex.Civ.ADD. -Austin 1975,writ ref'd). a taxpayer challengedthe--constitutionalityof the Limited Sales, Excise andUse Tax Act on the ground that such taxes are not specified in articleVIII, sectionl. The court held that, although the types of taxes imposed by the Limited Sales,Excise andUse TaxAct (nowcodified asTax Code §5151.001et sea.) are not enumerated in article VIII, section 1, the act was not invalidby reason of such. omission, because article VIII, section 17, specifically provides that the specification of the subjects and objects of taxation set forth in articleVIII, section 1, did not deprive the legislature of the power to require other subjects or objects to be taxed in suchmanner as may be consistentwith the principles of taxation fixed in the constitution. See also Guinn v. State, 551 S.W.2d 783 (Tex.Civ.App. -Austin 1977,writ ref'd n.r.e.) (uphold- ? ingmethod of requiringemployer taxes imposedby article

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522123-5,V.T.C.S., which provides for a system of unemployment compensationfor certain specified unemployed workers). It ispursuant,then, to article VIII, section 17, that chapters 156, 351,and 352 of the Tax Code (and their respectivepredecessorstatutes)were enacted.

Among the principles of taxation fixed in the constitution in accordance with which such unspecified objects or subjects of taxationmay be taxed are: that all propertymust be taxed and that taxation must be equal and uniform, Tex. Const.art. VIII, 51 and that "the legislaturereny,

by general laws, exempt from taxation" a specified list of properties, Tex. Const. art. VIII, 02 (a). Section 2(a) also provides that "all laws exempting property fromtaxationmentioned in this section shall be null and void."

In Citv of Wichita Fallsv. CooDer, 170 S.W.2d 777 (Tex.Civ. App. - Ft. Worth 1943,writ ref'd), the court overturned a city ordinancethat purported to exempt from city and county taxes $3,000of the assessed taxable value of residence homesteads. At that time, article VIII, section l-b, of the TexasConstitution exempted $3,000 of the assessed taxablevalue of residence homesteads for state ad valorem taxes only; the amendment to article VIII, section l-b, that authorized counties, cities, school districts, and all otherpolitical subdivisions to grant also a $3,000residence homestead exemption was enacted in 1972 and took effect January 1, 1973. The court declared the following:

It is clear tous that itwas intendedby the framers of our Constitution that all property shouldbe subject to taxation, upon an equal and uniform basis for the purpose of defraying thegovernmental expense, ~j& the excention onlv f.such oronertv as that document soecificalyvexemots therefrom and such as the Leaislatureshall, under Constitutional restrictions,bv exolicit lanouaae. declare to be exemot.

It is the universalrule in this state that the Constitution has definitely provided for every form of exemption of property from taxation;that if an exemption is somade it cannotbe enlarged upon either by the Legislatureor by the courts.

. . . .

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It is a matter of common knowledge that there are many taxing bodies and units in this State; they include the State, counties,municipal corporations, including cities and towns, water irrigation districts, schooldistricts and others.

The Constitutionalprovision relating to exemptions of homesteads from taxation (Art. 8, Sect. l-a) is clearly limited to taxes for State nurooses. That is only one of the many taxes, or in otherwords, taxes for one of the many purposes to which all property includinghomesteads is subject. There can be no enlargementof that exemption so as to make it exempt from taxation for any purpose not expressly stated in the Constitution.
Apparentlydefendant recognizes its duty to tax all property (notexempt)within its limits upon an equal and uniform basis for the purposes of raising revenue to meet its operating expenses,to pay interest on its obligations and to create a sinking fund to meet its bonded indebtedness at maturity. It therefore follows that defendant must levy and collect taxes against residence homesteadswithin its corporate limits for these purposes. The homestead is made taxable by law for all purposes except for State purposes. (Emphasisadded.)

170 S.W.Zd 777 at 780-81. See also Graham v. Citv of g rthWorth 75 S.W.2d 930 (Tex. l&4, writ ;ef#d). Civ. App. - Eastland

Analogously,we conclude that a home rule city or a county lacks the authorityto grant an wexceptiont* from the hotel occupancy tax, absent constitutional andstatutory authority to.do so.

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SUMMARY

Neither a county nor a home rule city possesses the authority to grant an "exception" for religious, charitable, or educationalpurposes from the hotel occupancy tax absent constitutional and statutory authorityto do so.

MATTOX Attorney General of Texas

MARY KELLER FirstAssistantAttorney General

LOU MCCREARY ExecutiveAssistant.Attorney General

JUDGE ZOLLIE STEAKLKY SpecialAssistantAttorney General

RICK GILPIN Chairman,Opinion Committee
Preparedby Jim Moellinger AssistantAttorney General

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