Honorable George H. Sheppard

Comptroller of Public Accounts Austin, Texas

Dear Sir: Opinion No. O-3709 Re: Are gross redeipts, earned wholly within an incorporated city or townby a "motor carrier", holding permits as a contract or s ecial commodity carrier, under Ehapter 277, Acts, Regular Session, 42nd 'Legislature,subject to an occupation tax under Article 14,H. B. 8,Acts, Regular Session.,!+7th-Legislature?

_ Your lstter ofJune 11, 1941, submits for our opinion the above question.

Article 14, Section 1 (a),House Bill No. 8,Regular Session, 47th Legislature, levies,the following.occupational excise upon gross receipts:

"Each individual, partnership, company, association, or corporation doingbusiness as a 'motorbuscompany' as defined inChapter 270, Acts, Regular bession of theFortieth Legislature, as amended by the Acts~of 1929, FirstCalled Session of the Forty-first Legislature, Chapter 78, or,as 'motor carrier' 'contrac-tcarrier' as defined in Chapter 277,Acts Regular - gzssion of the Forty-second Legislature, over andby use of thepublic highways ofthis State, shall make quarterly on the first day of January, April, July, and October of each year, a report to the Comptroller, under oath, of the individual, partnership, company, association, or corporation by itspresident, treasurer, or secretary, showing the gross amount received from intrastate business done within this &ate in the payment of charges for transporting persons for compensation and any freight or commodity for hire, or from other sources of
revenue received from intrastate business within this State during the quarter next preceding. Said individual, partnership, company, association, or corporation at the time of making said report, shall pay to the State Treasurer an occupation tax for the quarter beginning on said date equal to twoHonorable George R. Sheppard, Rage 2, O-3709

and tw,otenths (2.2)per cent of saidgross receipts, as shownby said report.

. .'

In order to clarify the scope andmeaning ofthe term "intrastate business", the receipts fromwhich aremade taxable under the above act, the 47th Legislature, by House Bill No. 1039, provided as follows:

"The term 'intrastate business' asused inArticle XIV, Section 1 (a)ofHouse bill No. 8, Acts of the Regular Session ofthe Forty-seventh Legislature shallmean and apply only to thatportion of'revenues derived from transportation subject to the regulation of theRailroad Commission ofTexas."

The tax levy inquestion isupon the gross receipts of each individual, partnership, company, association or corporation doingbusiness as a "motor carrier" or "contract carrier", as defined inChapter 277,Acts, Regular session, 42nd Legislature. The definitions referred to are quoted, respectively, as follow3:

"'The term "motor carrier" means any person, firm, corporation, cornparry,

copartnership, association or joint stock association, and their lessees, receivers or trustees appointed by any court whatsoever owning,controlling, managing, operating or causing tobe ,speratedanymotorpropelled vehicle used in transporting property for compensation orhire over anypublic highway in this State, where in the course of such transportation ahighway between two ormore incorporated cities, towns orvillages is traversed; provided, that the term "motor carrier" asused in this a-t shall not include, and this act shall not apply to motor vehicles operated exclusively within the incorporated limits of cities or towns.

'1The term "contract carrier" means anymotor carrier as herein above-defined transporting property for compensation or hire over anyhighway in this State other than as a coinnon carrier.I" Although it isnot definitely 80 stated, we shall assume, for purposes of answering your question, that the receipts upon which the question of taxability is raised, are receipts earned solely inthe carriage ofproperty from onepoint within an incorporated city or town to another point within the same incorporated city or town; and that it isnot intended to include,
on apro rata mileage basis or otherwise, anypart of the gross receipts or compensation earned and collected by a contract or special commodity carrier, for the transportation ofproperty
over thepublic highways, bstween two ormore incorporated cities, towns orvillages.Honorable George H. Sheppard, Page 3, O-Ja

Under such construction and limitation of the facts, we do notbelieve aperson, firm or corporation carrying property for compensation orhire, under contracts of carriage originating and ending within the limits of an incorporated city ortown, is thereby constituted a "contract carrier", "special commodity carrier" or other "motor carrier", as-these terms are ,abovedefined, even though the same person, firm

### or norporation, using the samemotor vehicles, is additionally engaged fn transporting property for compensation 6rhire over thepublic highways, between two ormore incorporated cities, towns andvillages, under permits issued tohim or itby the Railroad Commission as a "contraot carrier" or "special commodity carrier", under Chap. 277, Acts, Regular.Session, 42nd Legislature.

. The gross receipts derived from this latter aspect dS the business would be taxable gross receipts, under Article 14, H.B. 8, Acts, 47th Legislature, because earned by such person, firm or corporation as "motor carriers", under the statutory definit'ion,subject to the jurisdiction and control of the Railroad Commission and therefore derived from "intrastate business" aa defined by H.B. 1039, Regular Session, 4'7th Legislature. But gross receipts of the sameperson, 

### firm or corporation, earned wholly from the transportation ofpr,operty from onepoint in any incorporated city or town to another point within said city 

### or townwould not be taxable. Such gross receipts would not accrue from "intrastate business'& as statutorily defined because such strictly intra-city operations would notbe subject to the jurisdiction and authority ofthe Railroad Commission, under the following proviso or exoeption to the term "motor carrier", as defined in Chapter 277, Acts, Regular Session, 42nd Legislature:
"Provided, that theterm 'motor carrier' asused inthis Act shall not include, and this Act shall not apply tomotor vehicles operated exclusively within the incorporated limits of oities and towns."

Wa understand that the departmental 

### or administrative inter- ;;;;;;ion of Chapter 277, Acts, Regular Session, 42nd Legisby theRailroad Commission is to this effect, and this fact i: entitled togreat weight in support of our Conclusion.
Trusting the foregoing fully answers your inquires, we are

Yours very truly ATTGR~NEYGENERAL OF TEXAS PMN:lh/cg s/.Pat M..Neff,-Jr. By .~ ".~~ APPROVED AUGUST 1, 

### 1941 Pat M. Neff, Jr. ,y/ CJrqv,sr

Sellers Assistant FIRST A:BSISTANTATTORNEY GENERAL