THE ATTOWSET GENERAL 

OF TEXAS 

March 1, 1988 

Honorable Ralph R. Wallace, III Opinion No. JW- 865 

Committee on Cultural and 

Historical Resources 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 Representative Wallace: 

Chapter 156 of the Tax Code imposes a hotel occupancy 

tax, levied by 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 educational purpose." Chapter 

352 of the Tax Code (previously codified as article 

23726-8, V.T.C.S.) permits certain specified counties 

likewise to impose by order or resolution of the commissioners court a county hotel occupancy tax. Chapter 351 

of the Tax Code (previously codified 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 352 mentions any "exception" to- 

~the tax for non-profit corporations or associations 

"organized and operated exclusively for a religious, 

charitable, or educational purpose." You ask: 

Do counties and home rule cities under 

[chapter 352 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 

p. 4194 
Honorable Ralph R. Wallace, III - Page 2 (JM-865) 

[alct, without specific language in the law 

granting such authority? 

The "30-day exemption It to 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 consecutive days: We do not understand you to 

ask whether the aforementioned 30-day tax **exceptions" are 

constitutional: accordingly, we will not address that 

issue. We understand you to ask only whether a county or 

a home-rule city may grant *'exceptionsql for religious, 

charitable, or educational associations absent statutory 

authority. We answer your question in the negative; 

counties and home rule cities may not grant such 

'exceptions" without specific statutory authority. 

Article VIII, 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, article VIII, section 17, of 

Texas Constitution provides: 

? 

The specification of the objects and 

subjects of taxation shall not deprive the 

Legislature of the power to require other 

subjects or objects to be taxed in such 

manner as mav be consistent with the 

princioles of taxation fixed in this 

Constitution. (Emphasis added.) 

In American Transfer & Storaae Co. v. Bullock, 525 

S.W.2d 918 (Tex. Civ. ADD. - Austin 1975, writ ref'd). a 

taxpayer challenged the--constitutionality of the Limited 

Sales, Excise and Use Tax Act on the ground that such 

taxes are not specified in article VIII, sectionl. The 

court held that, although the types of taxes imposed by 

the Limited Sales, Excise and Use Tax Act (now codified asTax Code §5151.001 et sea.) are not enumerated in article 

VIII, section 1, the act was not invalid by reason of such. 

omission, because article VIII, section 17, specifically 

provides that the specification of the subjects and 

objects of taxation set forth in article VIII, section 1, 

did not deprive the legislature of the power to require 

other subjects or objects to be taxed in such manner as 

may be consistent with 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- ? 

ing method of requiring employer taxes imposed by article 

p. 4195 
Honorable Ralph R. Wallace, III - Page 3 (JM-865) 

522123-5, V.T.C.S., which provides for a system of 

unemployment compensation for certain specified unemployed 

workers). It is pursuant, then, to article VIII, section 

17, that chapters 156, 351, and 352 of the Tax Code (and 

their respective predecessor statutes) were enacted. 

Among the principles of taxation fixed in the 

constitution in accordance with which such unspecified 

objects or subjects of taxation may be taxed are: that 

all property must be taxed and that taxation must be equal 

and uniform, Tex. Const. art. VIII, 51 and that "the 

legislature reny, 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 from taxation mentioned in this section 

shall be null and void." 

In Citv of Wichita Falls v. CooDer, 170 S.W.2d 777 

(Tex. Civ. App. - Ft. Worth 1943, writ ref'd), the court 

overturned a city ordinance that purported to exempt from 

city and county taxes $3,000 of the assessed taxable value 

of residence homesteads. At that time, article VIII, 

section l-b, of the Texas Constitution exempted $3,000 of 

the assessed taxable value 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 other political subdivisions to 

grant also a $3,000 residence homestead exemption was 

enacted in 1972 and took effect January 1, 1973. The 

court declared the following: 

It is clear to us that it was intended by 

the framers of our Constitution that all 

property should be subject to taxation, upon 

an equal and uniform basis for the purpose 

of defraying the governmental expense, ~j& 

the excention onlv f.such oronertv as that 

document soecificalyv exemots therefrom and 

such as the Leaislature shall, under Constitutional restrictions, bv exolicit lanouaae. 

declare to be exemot. 

It is the universal rule in this state 

that the Constitution has definitely 

provided for every form of exemption of 

property from taxation; that if an exemption 

is so made it cannot be enlarged upon either 

by the Legislature or by the courts. 

. . . . 

p. 4196 
Honorable Ralph R. Wallace, III - Page 4 (~~-865) 

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, school districts and others. 

The Constitutional provision 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 other words, taxes for one 

of the many purposes to which all property 

including homesteads is subject. There can 

be no enlargement of that exemption so as to 

make it exempt from taxation for any purpose 

not expressly stated in the Constitution. 

Apparently defendant recognizes its duty 

to tax all property (not exempt) 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 

homesteads within its corporate limits for 

these purposes. The homestead is made taxable by law for all purposes except for 

State purposes. (Emphasis added.) 

170 S.W.Zd 777 at 780-81. See also Graham v. Citv of 

g rth Worth 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 authority to grant an wexceptiont* from 

the hotel occupancy tax, absent constitutional andstatutory authority to.do so. 

p. 4197 
. Honorable Ralph R. Wallace, III - Page 5 (JM-865) 

SUMMARY 

Neither a county nor a home rule city 

possesses the authority to grant an "exception" for religious, charitable, or educational purposes from the hotel occupancy tax 

absent constitutional and statutory 

authority to do so. 

MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant.Attorney General 

JUDGE ZOLLIE STEAKLKY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Jim Moellinger 

Assistant Attorney General 

p. 4198