486 

OFFICE OF THE AmORNEY GENERAL OF TEXAS 

AUSTIN 

Ebnorablo Cieor60 H. Shoppar 

Comptroller of Public roeountr 

Austin, TIxa8 

Dear Sir: 

08 rhow that the plaoer in 

iU43 ?OiZ-if$OFAtOl# PIe #Old 4nd 

lanoar are solb, arm 6t.o;;: . 

0 Chain Store Tax Law. 

ena tatore oonotitute me rlaglr 

orpant. chain0 on tha theorf that 

nefd*r thrt ator in whioh ior rerriewwithin Seotlon 5 and that the8 torae in 

which sleotrioal appUanoe# are eold 004~ within Soctlon Sa, 

an4 that you desica to know whether 6torer trade Sootion 5 an4 

atoror under Wotloa SE ~onrctitute 8eparato chain8 or one 

dngla chain. 

The Taxa8 chain Store Tax Law WM originally pas8d 
tlonorable Geor&e is. ahopysr4, Pa@ Y 

a8 ilouse hill ho. 18, chapter 400, dot8 19J5, yorty-fourth 

hgislaturo, Yirst CalloQ ijesaion. ad It la oodliled aa Artlole 

lllld or iferon*n AtiAotated Penal Code or the State of Texas. 

me term 9~toro* 18 4erhe4 in :2eotion 7 of raid 

L&W uo r0ilows: 

“iloo. 7. The term *~tor.* a8 ~8.4 in thlo 

hot 8Aall be oonatrued to aeaA and Iiiolude any atore 

or storer or any srreaatlle establishmat or 

l stabiishmats Aor ap.Oifioally l xenpted uithln 

tbi8 Act wbloh are owned, operated, matatained, or 

oontrolled by the base person, agent, receiver, 

,trurtee, rlrta, corporation, oopartAer8hIp or 

aawol~tlon, either doaeetio or iorelgn, ln whloh 

goods, ware8 or IwroAandlro of Amy kind are sold, 

at ret811 or whole6818.* 

The parts 0r the law that desitjpate the 8tor.r to 

r;hloh it a2pll.8 are section 8 8~4 Seotion Sa, whioh read 

4ts roiiowrt 

Y3.0. s. IIvory perron agent, rooelver, tru8t.0, 

rim, oorpomt Ion, a88ooIat1on or 0opartAerrblp opeains, ertsblI8hIng, operatfng or amlntalnIA6 on. or 

:WY)I. stores cr .mroantlls establi8haents withes thlr 

State, under tho r)*.ae genwal #AWUi&emeIIt or ownership, 8hsll gay the lloe~ae roe8 hereinliter presoribsd ror the prlvliege of opening, e8tabllshIn(l, 

oporatlcg or PraIAtaIAlAg buoh #tore8 or meroant~l~ 

l 8tablIehmeAt8. Tho lioense fee herein pTe8Orlb.d 

8hall be paid annually anb rhall be in addition to 

the riling Se0 preuorlbed in tieotlon8 e and 4 of thin 

hot. ProtI&ed that tho terms, *otore, 8toro8, mmcantfl. .stablishaeAt or a@roantfir establi8tints' 

wh.A.T.r Us.4 iA this POt .hali Aot IAOlUbO: wholesale and/or retell 1urob.r and building material buslA9S808 .Agagi:d exoluslvely IA the sale or lumber an4 

butl4IAg zaterial; an&/or 011 aAd &a8 rail 8upplie8 

and equIpmAt dealers; or any plaoo 0r bUsln.scr *Ag o g rl xolusively d IA the atorlng, aelli~g, or aintrIbutIAg or pstroleus produots a~4 8ervloIng 0r 

sotor vehiales; or any buriaera now paylng an OOOUpatiOA tsx zea8ured by glBo8. rO..Iptsi or any plao. 
I HoAorable 6oory ii. iiheppard, Page 3 

or ylaoee of bu.iA.8* u8.4 a. boA. rid0 whol.8al. 

or retail 4istrlbutIAg points by amnufaoturln~ eonottma ror di&trlbutiOA 0r produats or thrlr ow 

manufeaturr 0Aly; cc any plaor of places 0r bu8iae88 

use4 by tons ride procoosorn or dairy poduetr~ror 

tho exelu8lve se10 at retail of auOh products. 

Tb. lloen8e fee8 horein preeorIb.6 shall be 

~8 roiiowu t 

+1. ;pOA o~i(l (1) store the 1iooA.a fee 8ball 

be One Uolier ($1); 

"3. uL;oA O&Oh .d‘iitiOA.l StOr. iA QXO... Oi 

on0 (1) but not to exoo.4 two (2). the llaen8e r00 

shall be Six Dollars (@)g 

rn3. Up2A eaah adaitfonal store ifi 0x088~ or 

tW0 (3) but Aot t0 eXt064 iIV0 (b), the lIOU&SO f.0 

shall be meAtpriV0 Dollars {Qar;)i 

*4. upon each ~tiaciti0m ntore in er.oa88 of 

ilr. (5) but not to .xo..4 ten ilO) the ll..A8a i.. 

hall be Pirty dollars (#soi; 

“6. UpOA each additiOM1 titOx-0 in OXOOeS O? 

tan (10) but Aot to exoeed twenty (izO), the llo~se 

i.0 oh.11 b. OA@ Eundrod fifty ~OlltW. ($A.#))1 

Upon eaoh addltloml tatore ia e%oe88 of 

twant;Bizoj but AOt to .XOO*d thirty-rive (86) 

the lIoeAe. fro &&LA ba Two Hunetred yifty Uolkrs 

(WQK)J i 

UpA oaoh additiOAa1 btOre ik OXOsa0 Or 

th1rt;I;i.e (35) but trot to rxoeod fifty (50) thn 

iioeneo Pet sball be live Hu~4re4 Uoliars O&O); 

"8. UyOA caOh 84ditloAul StOr0 fA 0XUI.8 Of 

firty (so), tim lioeneo r.. ahrrfl bc 3Y.A Hurdred 

imty Uaifrrrs ($7M)); 

"Such ree8 are r0r the pcrloa of twolT. (A&) 

mnthn, an4 upon the issuance 0r any lloenae aiter 

the firet bay 0r January or aAy one year, thsra 

shall bo coll.ot.4 suah rractional pert of the llOeABO hereinabove rix84 a6 t2. resvlinlne moatho in 

488 
iionorable Georm ii. Yhopmd, Page 4 

the calendar year (InOlUding the month IA which auoh 

license is Irsued) bears to the twelve-Ioonth period.” 

%ec. Da. mery person, agent, recelrer, truatee, fIra, corporation, eaaocIatIon and/or copertnarshlp opening, establlahing, operating end/or 

omlnteinlng one or more atOr or maro&ntIle eatabllshmmta nlthln this atate under the aeme generr3 

rnrgesent and/or ownership and selling therein pnl 

equipment or epplIa~ao8 operated and/or used in 

oonnectlon with eny l lectrIcol currant W/or natural 

pa and/or artIfIcIe1 gas whether the aamo ba In oonAeotlon with tne aale of electrical ourmAt ur&/or 

netural gas and/or artlflolal gas or not and whether 

such person, rlra, agent, reoelvar, truatee, oorporatlon aasociatlon arid/Or coputaerahtQ be dao 

l Ageged L the buelneea of WrnIahIng aom publio 

utility aentoea or not ah811 per the lioenae roe8 

hereinabove prescribed tar the privilege oi ope~lng, 

eat&blIahIng, operating rob/or melnklnIng aooh 

stores or mavmntIla aatAbllahzmnt8. Tha lloeaae 

fee herein preaorlbed la Appllceble to thla Sootlon, 

ahall ti,paid annually, and ahell be in l QdltloA 

to the riling is0 prescribed la Seottons 8 and 4 

0r tbia ut. The license fee hereia preborlkd end 

applicable to this beetloon ahall be ea rollmar 

.*1. Upon one (1) otore tba lloenae fee ahall 

be One Uollbr ($1); , 

“2. Upon each fibQitIona1 storb In 0x0*88 of 

0110 (I), but rI0t t0 OX0086 tW0 (21, thO iiOOC8O rO8 

l hbll be air Siollera ($5); 

“3. Upon each addItIona 8tOre In bxceaa of 

two (a), but not to 0x0004 fir0 (5)‘ the lioe~ae 

tea ahall be Twenty-ilV0 Dollera (;)&b)t 

“4. Upon each adc;Itlcnel atore in emmaa of 

rire (8), but not tq bxoeee ten (lo), tae lloonae 

fee ahail be Flrty uollara ($50); 

“5. Upon each eQdltIeAs1 atorb In ex~eaa of 

tan (lo), but not to oxCOd twenty (80) , the 

llcenas ree ahall be One Iiuidrad PIfty tiollera 

(31c)O) : 
490 

Honcreble Oeorge ii. dhe~pPrr&, Pege b 

Upon aech ad6ItIonal ctore i:~ excess or 

twentjbi20), but not to axceed thrlty-rive (35) 

the licsnse fee shall be ‘fig Lfundred PIfty Do&a 

(8~50) i 

“7. Upon each? addItIona store in exaees of 

thirty-five (33) but not to exceed fifty (80) , the 

i.Icel;ts fee shall be Five Euabz‘ed ?;oliara (#BOO); 

“8. Upon each aP~~ItIona1 otore In axceap of 

fifty (601, the license rae ehall be &even Xur14rod 

rlfty Loliare (#75G). 

suofi reefi 623 r0r the period or twelve mntha 

(lZ), and upon the I~sm~ce of eny llceneo after 

the flret Cay of January of any y ar, there shall 

be collected such fractional part of the lloenae 

herelnebove prescribed aa the remalnfng wntha In 

the ccllender yoar (Iuoludlng the month In whloh 

auoh lIccuea la laeued) beare to the twelvr-month 

period, prorIded, hovmer that should this Section 

Se and/or say pert thereof be for any reason declared void, unoonotftutlonai and/or Invalid, such 

Inv~llblty shctll never be OonDtrued so aa to aifect 

eny other oeotion or aubaactIon, part or portion 

of t;,Is Act acid shall In nowiae affect section 5 

haroof but It IO the LagIaietIra Inteut that all 

or t,c rtuixiaer or this 1;ct should remain in ruu 

for00 aad dib0t in spite of an3 Inveildl~y 0r this 

Aectlon 5ra au&/o/or unp pert thereof ac8 the L&ahture would imve Iqxoaod the tar Lqoeed in Seotlon 5 hereof regardicea of the vaildlty OT lnvalidity of ;iectlori 516 ad/or cay part tbr00r. 

*Tilie 3eatlon nhail be conetrued 00 a AInltatlon upon tiae exceptlou in &ectIon 5 hereof of 

bualneases uow paping an ocoupatiou tax’ 1p4aeure4 

by groaz reoelpte.*f 

It will be CotIced that Soot&on 3 I.~poaea a tax 

en prraona operating *atoms or serceatlie astabllshmnta” 

but apecIfIoaliy srcludea certain bualnrs~~se amo&g which 

la “any busimeo now paylng an oooupmtion t&x .waaured by 

grass recQJlyts .* Houdvar, Seation 6a plaara a tar on *reons operating “store6 or aercantlle eatablIahaenta . . . 

eelllng therein any 6quipzent xc appliWie88 OpOratSd RR&/ 

or rued in oonnsotlon with an electrIoa1 currant anl/or 
Xonorablo C+borgr li. Shbpi#rd, Page 6 

natural gas and/or artlflolal gas.” The elsctriosl aoa gas 

l g u lp sssstabllsh~nta nt de8Oribod in Motion Sa are oleerlg 

stores within the dbtinitlon of kisotlon 7 (qufaa above) 

am3 rould be taxable under S@tlon 6 unlsm they ars ox0luaOa by the toros 0s sala 8eotion. By l peoiiloa~4 a+ 

rorlblng oleotrlcal and gas sQuipa@nt sstabll8hmnte aid 

pleoing P tax 05 tholr operntfon In Section be the Leglslatur0 was bound to ham 005sla0rOa th a t they werb l 0kiaOa 

froiptob prorisions of dotion 5. ‘S’ho only provision ln 

s0ti05 5 unabr dioh they 00ula be o058faOr0a 68 brine OX0luaOa 18 the prmlrlo5 Ox0iuai5$ *any bu8lnose sow Paying 

sn oooupatlon tax semrured by gram rsoolpts.* 

Prom a roadlng of both iisotion S an6 Sootlon Sa 

~0 800 that the LaglolaturO ala mare then plaoo en eraoption 

to an ub8ptiOn in ttib AQt. It would bars boba rntlrmly 

rs88ibls for the bglalatur* to hare put thu prorlrlon8 CC 

6botion Sa ln Seotlon 5. For uarplo, lmealataly anor 

the UOOptlO5O 15 sOOtiOC4 8 it OOUla bwO pVOtlaOa OO (UI 

l rerptlon to rala rxorptlous that pox’son oporatlng ortsbllahmbntr soiling thuroln l 100trloal and gar l qulpm5t wwe 

subjbot to the tax presorlbsd ia aa sbotlon 6. 

By way of analyals, it 1s apparent that t.ti Lsgishare haa nt up in 2sctlon S a5a Ssotlon ba two sopsrats 

tU; OohodulOO ubcl haa taxed two aimrm type48 of bwinncraro8. 

~8 pdntra out a0~b tLu miti8mum 8ppuent4 hOa in nLad 

that tbo p1OcO0 or burineae tax& an&or Seotloro Sa are not 

tU8a unam hotion 6 ana ~0 50t rtorer OS aerinea i5 sOotion 5. To tax as one oh&in all et the Itorob opuratbd by 

ona oo~%pany, whlohara taxable wider f3MtiOn S antI aloo -ution Oa, would bo to awes8 the tax at a higher rata thau 

proriaaa by tha Legislatum ror thb taxation 0s stores u&or 

iioetlon Ss In that the grouping oi all of suoh atorba would 

provent the payment of thr fme dollar rbb on the rfrst ston 

tuba waor k30otlon &a, eto. Oiio aru uuablo to rtoa 05y 

authority in the i&at for the taxing oi the entlro group of 

atorrr a6 onb ohaln. Thor0 ia no authority Sor auoh grouping 

in &aotion 5a beaus* a sopuato and distlnot tax l ohobulo 

has beon sot out by the LaglslatuSe for the tsxlng 0r rtora8 

oparatlng, under ruch ;reotlon. The ract that the seheaula 0r 

I tax.8 to be pala wabr 30otlon 6 ma sootion Sa are t& same 

mre olsarlg points oilt that had tiaa iegid.&ture so adrOd 

to group all of the storer, in one ehaln wau the sltuatlon 

as ~8 hare hers it would ham boon slaple for the entlro t,ax 

to bO aeseseea under Section S with thhs proper prorleo aontainwl I5 the bxaoptlons. 
Honorable fhor(lo Ii. Sheppard, Pege 7 

801~8 ipmrtlon 18 r&iroA ooaorrnlu$ the n8ult 

MOhOA in thia OPi~i05 b4OtiU84 Of th4 3A4t $~&I%kg&%k& 15 

motion 6a whloh reaae ao f'ollowr;: 

V~lu 44otloA shall bo oonmtrwd 84 A lirrit4- 

tion up o tn he l x0eptlon8 i5 ~eotl05 a hereor or 

buslnemciar now p&yin& an ooouyatlon tax samxrd 

by -8s rroalytn." 

Otmlo~8ly, th4 4bovo Quoted paramaph was put into tbo Aot 

to take oar8 of crny apparent or pceeiblr ooarllot kmnmon 

Seotion S 8nd Gsotlon 8a. 

It has baa l u~~stod that the elootrlaal axid 

r 

l l f#&MOnt EtOXW5 in QiMbtiOI3 A0 5Gt 06UU Within 451 Or 

& l xseptlons of iiectltm 5, and that thururora they us 

tuabls under ;iectim 5 15at8ad 05 urrber &eetlon &a. we 

wnnot ~68 with that coqtcntion bssause wo believe t&y 

am clearly ttu&bZe wAor ssotlon k by vla%ue of the wotia 

or *aid saotion 66 whloh araorlb* tairui elsetriad. m4 ~8 

l Qu@4@ 5t UtOr US Very S-g SGiiiOtiie u. CLT4a ~8 tb a hgh- 

&tare did net 1ntenU to tu thene fitoreu lzl both &motion S 

upb *at&on &a a;ld therab t4x tWm.Uoubla. Our 4aaolluloA 

i8 that tha i.4&Uture t & u&t&t th&t tha 4X44ptioa in SACtlon S whleh unya “a&y bwlnsea Iiow paying &II ooaqwtlon tu 

uasureA by groes r@Wlpt#” i5@ltrd4d store4 OQUMM by g&8 

a sal t leotrie oo~al~8 boanu8e MIA 4o~aganlor plA a @oar 

reOetpt8 tu under ActlOl4 70b0 Or the B4Vl4.6 Civil Statate 

of Texas 011 tha &b8 and .IrOtriOitf ~~10; and tJn b&8htUl'O 

Aid Mt wdllt 4u5i.i 4 004UmFhJ to OReA 4A 4p~~i4544 4toT4 and 

not br r4qSod to wy 4&w oh4in 4ton tax.8 on the operation 

or moh .storeb, anb in oxder to be are that taxer wore paId 

OA tt24 oprratlon of 8~4n store8 4 wpuat* taxing sot, to-wit, 

&~OtlOn k, W&S Wl'itt5A i5tO th4 Act. &WthU WUOA Why U@ 

doubt ths su&$rstlon that tbeso appltanor rtomns eirs taxable 

waer seotto~ 5 iAd.aA 0r &WStiQA sa 14 tint lr w Q&O0 

suoh a emstruetlon on the -ot it would rreult 15 Ejeotlai 8a 

tmt tnring any';hbg WA being a~plrt~t~g~. 80 ShOUld a~014 

ouoh a eonetrui2tion if y~asibla. Xn ths oaas of Amstrong 

V. &at*.,. lo@ Tax. Cr. II. Mb, SOS S. $i. 817, the murt MIA: 

*It 14 the aaty or tbr court to cons,trw the 

tarlou ortlol68 of the 8tatutr 15 l aoh a way a8 

t0 give dr00t t0 641 of tb8, if it 811n be be58 

without violsnos to mtatutory ooaetrrtotion . . .* 

@IO mro not unmindful of the faot that ln thr, ease of Hurt v. 
Monerublm Gwraa 11. tihoppard, P40 83 

Coopof, 130 POX. 4x5, 110 3. I+. (%dj 896, 

rdwriag to thla partla+m l x a ep tlt in +t 

the oourt, in 

t.& Clmlo store 

TU IAU, aaid by Way Or diOtU that "it app4aTa thUi. th Only 

bwlnosa whioh would bo l xrpptod under thle provtsion lr 

t&t ot publishing usl 88lllna toxtbook8;" but uo believe 

thut th+ Le~irlaturo had in mind thut #tome of the kind 

under oon8idarutlon in th$.s oglalon would some under thi8 

exoe$tion, and ue 80 ho16. 

I%@ think it L8 apwr8nt that tha &~&.uture latontlod that the rtorer uader &motion a aad the rtoror unbr 

308tiOa 8U b . O@ WfdW@ d l 8 8OpUZUte Ohins. It i8 a rule 

Ot iv8W that ii pO88ib1. a OOlls~u+3tioa 8hou.ld b8 plaa.d 

WUl;atUt8 80 48 to. e;iVr df.Ot to the bgi8htW@'8 tib9 Tar. Jur. 186. nnothor aOn8i.dweitiM i8 ta8t 

011 idoJ i, lo%, i&l M Att0Dn.J @8tlwti’8 Opinion WittOn 

br A8818tWt AttOW8y O8ll8ra1 &TOW 8 faOt situation th@ 

8a@8 a8 th4 0114 inVOlVd iii this OpiniOll WB8 0Oll8f48rOd, WA& 

it W88 hold that th 4 OJWUtiOn Of l 18gtriO8i 8pp1iMO8 8tOT88 

-8 tnxabl8 under SoOtlon Sa, and t&t 8tor.8 taxeblo Udr 

lh'h;Ih b,urb 8tOTO8 taxable UlUimr +W3tion St uoZ* 8Owate 

ih4 (UPa 8dV18.d thUt.yQU, ia ~WfOrmi~ YOU= dUtti8 

u8 dnirtrator of th8 Texa8 Chain Store Tax Lau, have tOitow.0 that oplnlon. The Suprepr Court or the Unite& Stator, 

8praki;inl; tht'OU&h JWtiOe hl'dOS0, in the 0680 Or ~OPWOi&M 

ultro~n CopIoany t. United i%at88, se6 u. 3. eOc* 53 sup. ct. 

w, 1’1 2. w. 888, 81ddt 

“TtW it d.80 18 th8t UddJli8tlrtiVO lWOtiO8. 

OOZb8i8tWbt 8Zi6 &MWUl~ WOhullM@Ob, Uil P Pot bo 

overtyrned 8X0*@ for tory oo~ent l’8a800s if the 

mope of the 608uWxd 18 lndeflnlto and doubttu2. 

. . . ,The pmOtiOa h88 pOOtiiUZ Bdght when it fnVO1V88 U t3O~t~3QO~4WOW OOtI8trUOtiOll Oi l 8tUtUte 

by the tic oher&ed with tha rO8&Wl8ibility Of 

wttin$ it8 rambinary %n feWian; Of Iruking tiW 

part6 ~orx a30i4ntly and 8SOOttiyvhile they are 

yet untrio6 8nQ new. - 

In th8 Oa88 of Chtk Vr Atlantis 

&aft, (writ of error nrfusod) th8 

Aud in 8aid: 

wConacivln~, wpeado, 

Pip4 Line conpuiy, 1.M 3. 'la. 

Court or civil dppealo l t 

tA4t tb s l._ M gu. c l(or . L* 

the Act 18 8usQ@.9tlbA.4 Of the Oou8tru0t1OSA tnat 

it eabraoaa titer a8 wall a8 intrastate bwineaa, 

it lWlif48t~ 18 CtOt 80 80 a8 DOt to 
493 

f8ator. 

-88, 

Zxpoolally lrc thir true regarding revenue 

th0 Wkdlki8tr.StiPI2 Of whiah i8 und.r 

aonatant obeorvatlon of the Legielatum. bee 

39 Ter. Zur., pp. f?34-E38, Lieotlone li% and lfS.* 

(Undaraooring cure) 

L’Or the TBBBOAS il.rChldJOVo 8t&h WO aitira the 

&tJWY ‘hAW&i'ti O&'iAiOA Oil this 'JllMtiOn drtSd SFiy 3, 

'I . se aacordln&ly hold t&at thrY 8tora6 you Qswrlbr in 

rhick loo rairfgerator8 8ro rold 3r8 taxable und8r s8otlon 

6 wd thr SirOtdCri find g&8 l juip !8tM At Or 8ys o u d68Wibm 

am tarabh under Stnctlon Sa, acd thet the stores under 

$%OttOP 3 hLU& th8 8tOlW8 UXid8r ZhHStiOA hi UOZl8titUte 86puata ah8 lne . 

CmOil C. BotrOh 

A88i8tMt