Honorable Robert S. Calve& Opinion No. M- 722

Comptroller of PublicAocounte State Finance Building Re: Taxability of bank share8 Austin, Texas of stock for ad valorem tax pprposes under Articles 7165 or 7166, Vernon's Civil Statutes, where the bink Dear Mr. Calvert: 18 not doing business. The question presented in this requeet involves the taxability for the year 1970 of shares **of 8tOok**  **of a**  **etate** banking corporation which on January 1, 1970, wa8 not doing business in Texas. Wore epecifically the question atatesz

"Whethershares of **stock** in a atate bank represented by instruments in writing issued on December 15, 1969, and contract8 forming an integralpart thereof, are taxable 

### for ad valorem tax purpose8 a8 shares of stook under Article8 7165,and 7166, Vernon Civil Statutes, Por the year 1970, when the bank wa8 not authorized to commence operations as a bank until (I) all conditions precedent of the State Department of Banking were met, and (ii)all agreement8 and contract8 among the principal organizer8with ita conditional shareholder respeatingwhether the bank would commence were compliedwith, and whiqh bank in fact did not commence operation until January 3.9,1970, such conditions to operate not being fully **8ati8i ’** **ied** until such date." The etatutea dealing with ad valorem taxation of bank8 and bank etock are Articles 7165and 7166, Title 122, Taxation, Vernon'8 Civil Statutee,which read in part: Article 7165: "Everybank, whether of,lissue' or depoalt,...shallat the tima,fixed by this chapter for listing personal property, make out and furnish the a88e88or of taxes a sworn statement ehowing:

-3493-Hon. Robert S. Calvert,page 2 (M-722)

. . . "4. All other banka, (other than national banks)... shall render their list In the followingmanner:



### ... 

### '5. All other property belonging or appertaining to said bank or buslneaa, includingboth personal property and real eatate, shall be,,lleted a8 other personal property and real estate. in parenthesis oura) (language

Article 

### 7166: "Everybanking corporation, State or national, doin + brinesa In thl8 State ehall,...render its real e8 ate the tax a88e8aor at the time and In themanner required of IndIvIduala. At .thetime of making euah rendition the president 

### or Borneother officer of said bank shall file with said a8Be88or a sworn statement showing the number and amount of the share8 of said bank,... Every shareholder 

### of said bank shall,... render at their actual value to the tax asse88or all 8har8S owned by him in such bank;... Each ahare in 8UCh bank ahall be taxed only for the difference between Its actual cash value ahd the proportionate amount per share at which its reti estate 18 aSSe88ed...." (emphasisadded). Each of these two statutes, on their face, would 8eem to require the rendition of real estate and personal property. This, however, la not the case a8 the Court in City of I Aar8hallv. State Bank of-Marshall. 127 S.W. 

### 1083 (Tex.Civ.App.1910, error refueedl, construed,these-itat&tes,taken together, %b m&an that Article 

### 7166,supra, operates:

II

...to except Incorporated state banks from the rovlslons of Article 5079, (nowarticle 

### 716571 n 80 far a8 that articlemay be relied on a8 a ba8l8 Of a8Be8Si of such banka." "f the personal property (page 10 

### 6) parenthesle ours). **(language** In

-3494-Hon. Robert 9. Calvert, page 

### 3,(&b722)

From the oonstruotiongiven to Artlole 

### 7166,mpra, it i8 evident that said Artlolemust b8 looked to alone, In dQte?minlng the taxability of share8 of 8tOak of a banking aorporation, This Article Is limited In it8 applioation to oorpQratiOnS In Texar. The banking corporationdesarlbed in thir not comence its buSine88 operations until January 19, 1970. On January 1,.1970,when the 1970 ad val,orem taxerWere a88e888da the banking corporationwa8 not doing bu8ineS8 in Texas; therefore, Its share8 of stook outstandingwere not required to be 

### rindered by the shareholders of said bank under A&iole 

### 7166,, supra. Where the ahareholder Is not required to rendar for taxation It allo fOllOW8 that he oannot be compelled to pay taxe8 upon the authority of Artiole 

### 7166,supra. City or MarShall'v. State Bank of Marshall, supra. The banking corporation is not Pequlred to render It8 issued 

### and outstanding 

### sharerand 

### ie 

### thezVfoPD not taxable on these sharea, The banking oor oration 18 not required to render such property under Artlale 

### 716 %, rup~a, and thr taxatlon 0r Lts pereonal property i8 exoepted rr0m the provlrlon8 of Artiole 7165, supra. !l& request limit8 its lnquirg to the taxability of .thebank share8 of stock under only Articles 

### 7165,and 

### 7166,rrupra.
SUMMARY

Shares of **8toak** of a banking oorporation are not taxable for ad valorem tax purposes under Artlole 

### '7165, Title 122, 

### Nxatlon,V.C.S.* nor are they taxable ror 1970 

### under **Article** 

### 71k6 of that Title where the corporationwan not doing buslners in TexaS_on January 1, 1970.

C. MARTIN Oenwal 0r Texu

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### Hon.RobertS. Calvert,page 4 (M-722)

PreparedbyWardlowLane Aesistant 

### AttorneyQeneral APPROVED: OPINIONCOIMITTEB KernsTaylor,Chairman BillAllen,Co-Chairnlan HarrietBurke Max:+Iamllt

on BobFlowers JackQoodman MEADE8. QRIFFIN StaffI&galb8i8tWlt 

### ALFREDWALKER Executivek38iStSBt 

### NOLAWHITE 

### FirstASeietant



### -3496-