OFFICE OF THE AlTORNEY GENERAL OF TEXAS 

%:ononble Gbo. 

Coaptrollor of 

* u&tin, Texa8 

a. Shopper6 

Publio Xooauata ’ 

521 

, 

.v,,/ -::..i:’ , ‘.

owt oplalon hddlng : 2 ; 

r attain storr taxen 

~0 ‘fax Xot, I nil1 

lnfons numbered O-2507, 

PO this ~!egertannt the 

h of Ceotlon 1 of Artlole V 

r eesalon of the Forty-seventh 

ag rmbw tbc‘t utilities ~ayii-16 an 

r thin Artiolo s&e11 not herrafter 

y the l~oonse fee irnpoeed in AHiolo 

1 SO. 18, Chapter 400, Aott ot the 

rilege of 88llZag 

s tar thr repairs 

popciletion acoorbing 

"Are store8 owned snl operated by utilities OOSpaah! in towns having l 909ld.stiOCL l*tt then 3,000 

i~abltimtt nw texablr under Beotion 5 of tbr Chain 

3tOra Tax Aot?" 
522 

l@norcbla 080. II. Gheggard, pcge 2 

xs SSLII~II~ that the rroent oourt opinion referred 

to in your lattar ia thvt of Contra1 Power k Lkbt Co. V* 

;tste, 165 3. !P‘. (26) 920, in wliioh wrlt of error v&e tofused 

by our state 3upreme court, and hppacl alsmlered by the Supreme 

Court of the Ynnltcd ?tattn, 87 L* Xd. 926. 

ztt Our OjdAIGA &050. o-2507 WO held thct !%AtlGA* 5 

cad 5a OS ~Art.lllld, V. P. ,C ., set up two separate tax aehadulas 

and taxed two oaperota bud3oa860, snil that storrt opsratd by 

utnity a~ap~nloa ima whlo4 were cold aleotrlo end ear l WPaeat end applicnooa ware,texcble under Sootion 5a, while storer 

oFar:tad by suoh ooa~cnlaa end salllng other aerohandiee were 

taxcble under 3eotion 5, and that auoh OhQiAQ Were Sapcrcta, 

an& the storer oauld not be tsxe4 ts a olndla ohaln. Thla holdIna aas dlreotly bsrora the ooxrt in the Oentral Power 4~ Light 

coqany OWO, and was thero‘overrulaa, a8 ~11; be DOlAted out 

hcralnafter in greater detail. :. j

:~’ \.I,~ 1~ :‘:: : ’ !., ~’ 

In our OpiAiOn %oi&3637, wa, J&l& thet .btlOl4 5, 

3. 3. 8,.67th Leglelstura’ &inUln;i Artl;ole 7060, R. C. Y., 

exempted the atores of utlllty oomganias Iroe the OperntiOn Of 

thr CheLn Store Tax Law. 

b 0~ op;nion~Xo. 0-&2&i; we kield that if * 6as 

atillty OO~i~a~ ncn exan;lt fro5 tha operation of ,the Chain 

:tOro Tsx tow by raceon. of -the” lg&.l~, ismenki.ent to firtiola 7060’; 

it ?ould not subjeog itself td 1labi‘Llty by recnon’~of relllng 

t-da-in tmrohaa&Iae sooeptad in ptiynent for ne~ahsndlae 

~Jtborlzed to be aold under auoh exemption. 

ro. O-2507, 

$a our opinion No. C-435b.ve iolloved our oPln1on 

cnu had thct .W,oree or utility oowanfar lodatad 

lA ~inoorporeta~ tmm or jOOC or len#~population verb l rrbfaot 

to the tax under 600. 5 of Artiole UI6,tr. P. C., and that 

rtor- Of ruoh eompcnler 

‘ltlee or town8 of mora 

rtloh were i004t4a la lnoor~orrted 

A@* 5 of euotl rrtlol*. 

ihcn 3000 population Vera taxable under 

Ttre prrtiaent pert of Artlola 7060, R- C. 2.. at 

‘aaAa*a, kota 1941, 47th taeislature, H. .B. 8, ZXt- 5, %a- 1, 

rub aa rOnows: 

*And flrorldad further &hat utilitiee ~cy1.q an OOOUPStkn tar under thle ,;rtiole ebn,ll not here&tar be roqulred 

to Pay the ~. _- liaanra _---- -_- rme i~~o?ra~ -.-, ---- in rrtiol~, Rouua Blll 

i~Q*18; Chaptur 600, 

-- ._- ---- 

:toFre of iwaxy-Toart 1 Za&klatura, ror 
523 

. 

ifsnorabls 0.0. FL Shopparb, paes ) 

the pririlrgo ot selling gas and OlbOtrlO PppllaIU3Oa 

and parts tor ths repair thsraor, ln toann of thrst 

thouaand (3,OCO) or lb38 in po;sulatlGn aoootdlng to 

the next praotdlng Fmberal CODS*AS.* (L~;rhaaia ours) 

It ~1111 be aoou that the quotrd l mdaont to 

Art. 7060 wae dlr*oted ont7 to the l xuptioo oi au6b utility 

oompaay stores troa the tax %xpoaeb ;n Art1010 ~II* of the 

Chain &ore Tax Law. In Central Powtr .k Light Co. Y.‘,State, 

l ugra, the oowt in hold- that utilltp oompenlea wera subjrot to the tax kupoaed by Seation 5 OS the Cheln Store Tax 

law ueed the tollowlng languager 

“T&o pertinent bxb%ptfon of Sao. 5 MO of ‘any 

bueineaa now~pqlng aa oaoupqtlon tax ~lsaaureb by gross 

~:f~p&kociptz r;88 that FrbSOribsd iq ArtlOlb 7060; : ,: 

‘5”hr only ocouption tax &id by kppellanta _ 

ii. C. s., Vernon*n Annotated Clrll 3tatuttk,,irt.. 706!,,,,.:’ 

ahlob wa8 upon roooZpt8 only lrorm l lb o tr ilight o an4 

Doubr la iDcorporate& oitiss of not lraa ~thsn 2,,500 

Inhabitants sooortiaag to the next prtoodln$ Ll. 3. OOnaUa. 

Thla was not a gross rboofpta tax uponthe Qualneaa oi 

asrradanta ln that It dla not iaolude rsooipte from 

bualneaa 40~ outaidt ths doalgnatod olkiea, and dl4 . 

not lnolu4t reoelpts fmia say ot lto bualnesa, whsrarbr 

dono, other than the supplying of elootrla ourrent.. The 

tsrm *menaurwl by &rosa rboalpto’ 1s all laoltislve an4 

~XOludss the ao,?oept of reoalpts maaure~l by anything 

ltso then all b*mlnoao done. 

*J, utllt;, -&ioh did not operate or maintain l 

*tore or othtr brrslnsea eatsbliah~eent where aerohandlao 

wao sold. alsrrly did not ooze within tee ~urvlvn OS 

the Aot. mera it oper;ltcd stores tar auob sale, it 

a13 no reoslpts tax upon that bual,nesa. ComesuuiitlY, 

,t oOUld not iall within thb bXOePt10n, 

Of the 

The very purpose 

exoeption was to relieve froa payin% two otioupatlon 

turn,, nonely : a sale tax and a ehala otore tax UpOn tt* 

mm ntrohandi.sing buc$lntaa.* (Espheala our@) 
524 

Huaoroble Oeo. !?. hoppbrl, pxe k 

iief0rrlr.g to tDb boldl:.g. ot thd fupreme Court ln 

tee east of Hurt Y. Cooper, 130 i’ex. 433, 113 S. .Y. (21) 896, 

the oiurt further statedt 

“It la .zenlftat that tta ?uprcne COW’Y did not 

regard an eleotrlo utility, whioh aleo operated #tom8 

vlthia the iraanlng or the Lot, 80 irom;a by rOMOA 0r 

the ract thnt It peid a gro66 rtoriptrb tax asoaure4 only 

by a part of ttn buolneas In supplylq l leotrio ourreAt.* 

&ala, :n dlsousalng tbs efEeot of SbOtlOn ia, tba 

owrt aald: 

“while the saotlon vaa in efi’eot 5brOlY oumulatlve’~.,~‘,~: ~ _ . 

of rjeo. 5 in teats it8 proylaioAa were already iaoluded*~- ~;i~ 

therein, ita gurpose may readllp~ be explalhe4’ as a ~olerl-- !‘. 

rloetlon or the rcurth~ bxoeptiozfin 560: 5t~n’,,; 

,,- 

” ,~:,’ ..,,;, ,~:’ : ’ 

Illh the oaae of fiurt v. Goopsy, a’iipra, the Suprode 

Court rxprtsalp statcd that the OAly bwlnrsr fallin; s;ithlA 

tka ttrsra of tbc *fourth cxooptloa la 3~0~ 5* whfob III “anp 

bushtea nov payfag nn oooopatlon tax mbeaured bli &roan re- ,. ~r.l‘+:,, 

oelpta* vae teat or textbook publleheps.. i ~. 

_ .?.l ; CT .* .‘: I,,’ 

,. . .*..,‘ .; ‘~ I _ 

* ,_ 

cI osrefril reading of’ the oplnlisaa In the’ cams of ‘. ,‘! 

Central -Or tr. Llsht Co. Y. State, and Hurt Ym CoOpb, aupra, 

~‘, 

i 

lfmis to ths lncsorpable oonoluulo~ thnt nom of thb stores 

of utility ooq~ganles have ever buea subjsot to tax under 300. !h, 

:a. lllld, v. P. c., but teat all of 6u0e atom.8 hrve been sub- 

: 

i 

j*Ot to the tar lm;ossd by Sto. 5 or auoh WtlOle et cl1 tiQbS 

i 

*lnoe the onaotaent of tbe law. The Lrglslature, ln passlag 

the amendment to hr‘t, 7060, did not undertake to rxeapt thr 

: 

otorea or suoh oo~psalea rmnl t&s op'eratloa Of G60. 5 Of tea 

Chin “tore Tax LOW but oaly attempted to axren?t oartrln ntOroe 

2 *m% thr operation if %a; 5.~. Clenrly auoh asenbatbt had no 

. l rf@ot upon the o?eratlon or ho. 5, and orlr opinion So. O-3637, 

i lnaofar es It dt&ras teat no rurt:er tax o&n be oollc.oted on 

5. tuoh stores by yirtuv of tht prcvlrlbna ol Situ. 5, to that extent $1 a ivy -0ASOu8, and suoh holilng la ,h/:reby oV6rrUltd. 

1~ 
I . . r 

~onorabls 080. ii. %~ppard, page 5 

:‘io are oonrlnotd that all Stores ai utility 00u~~n10~, 

wheraver loo&ad In this state, havo been taxable \mdor the protlsloao ot Sso. 5, ,‘.rt. 11116, ‘i. P. C., et all tlmba alnor the 

efieatlob date of that etatutb, and that the quoted amndmbnt to 

irtlolo 7060 was wholly 1Aetfsotlve to remove natoh llablllty, . 

alncr t&t anoadasnt nas dlreotbd to the p~ovlslonr of Sea. Sa 

only, and the obtlwa lnttat of the Leglslaturb wae rimply to 

l ll.finate whatovar liability, ii eny, whloh erhtc4 r&iBrt thb 

8tores nsmed therein by Vlrtuc of the Drov~S10ns Or suah nbOt~OB~ 

It follows thst year question must bo rn6w6rbd fn the 

rrflrmatlvo, 8nd insofar OS our oplnloar Wnbera o-2507, O-1354 

and c-4269 are ln oonfllot with th:S oglnlon they are hereby 

l x~rbasly ovrrruloa. 

ao reel, however, that lt should be pointed out here 

that sec. 5 ot the Chain store Tar Law (.+tiolc 11116, V. P. 0.) 

vSS a&ended by H. 3. 30. 10, Cot8 1963, 68th Lcglrlaturok This 

bill wns >aaseb ma an emorgenoy 21b&BwO, but did not rOOeiV0 the 

rbq;LlSlta A:;mber or votea to beoonao lxaedlatbly 8ffeOtlvO. It 

vi11 beoo.:o orrbotlvb, however, ninety days after the adjouZAQoAt 

of the Lsglslaturb. 

30 rbr 89 this bill arfootn tho llabillty 0r stores 

Qr Utility .ooe~pm~los, it provides that no Ohein rtoro tax or 

fee shall be roqtired or suoh stores or suoh oon?aAios whore 

they are 100at0d in tOWnB or 3000 or lass populetlon, provided 

that an mob ae ScveAty-rive per oont of the total gross rbcfdpts 

0: such oozxpatibs duriA6 the prebobing, year ki each town where 

3aoh storea are located wee dltrlvol from the sale of gaae and/or 

elcotrlo 1~0n1oo~ &Ad provldoa furthor that all other ntoror oi 

b-h utility ooa$anlen, whloh are loo&M in towns of znoro than 

!SOO popu.lation,Shall 

* ~4 5 or the isot. 

pay only the fees lnpoaed bY 3botiolU 2, 

Thus Ii, a. 10 ‘oloarly bli1%!AtttbB any quaarb or the llabillty 0r euoh store8 UAdar the provlrlone 0r 

-We 5s. The &QtiOA oi the LagiSlatUre 1A SpOOifiOa~iy Stati= 

rib~*l~,osed by q6QtiOAB 2 4 aad 5,” thur Oliah?itiUg SAY pan10 thst suoh stores Shall be ‘requlrad to Ray only tho 

‘lb14 liability ‘;nder set.’ 5a, supporta the poaltlon herblnabooc 

rakaA, that the tmend::ent to ;rtlcle 7060 ??a1 llhmlso blmply for 

UQ Purpx~ or blinlnatln~ any posblblb liability si the 8tOres 

AapW the-eln under Sea. 5a. This action 0r the Leylalaturo also 

“Phsalzca the fSet that the aneAd;leAt to .4rtlole 7060 wOI not 

lAtb~aEd to and did n‘,t alter the lleblllty Of SW BtOrW Under 

“@ trOTl~l0~6 of ::eo, 5. 
Trilstln< that the sb+'e filly t1ABWWB your inqtin, 

we are 

,d&& 

Fowlbr ~obbrta 

Anelrtant 

., ,. 

., (‘~ 

I’. 

:.t, I’ .’ ~_