i

**OFFICE OF**  **THE ATTORNEY**  **GENERAL OF**  **TEXAS AUSTIN** 

January 30, 1953

Xcnornblo ‘Xarold

liaCmokeq Civil Dictriothttornoy Dnllna,Toxas
Dear Lr. 2LccmckQIl:

Xc are in receipt of nokin:: 0:ir opinion 88 to whet& ooq3or3t ion o~~,nnlzod for prof

i nd vnlorcru

tax00 under tho So inoorporctod

under tha la%3 0 buslncss in this Ltato. i’he D%llna County, Totit. office and plaoc of co;llpany’s

assots OS thQ mlits OS tile

3 t for th:, corqmnyws hew a pcmit to do ock rooidca in

texotidn.

Mrioed Civ11 Gtatutao,provldes.in part: rortldj ;

tc -~ nt ahaj.1

truly and Ciatinctlgaot
"30. hdount nnd value of ahnroa OS capitnl stock oompnnlss and assooiatlonb not inoorporatod

by tLo lavts

or .t:li# ax-&to. I “43. Value of all qthvr property not onuncrated above.”

< &Aiclo 7163, iievivioad Civil %ntuton, rccde:f.

1 Hon. :Iarald

XcCrnckon,Jnnwry 30, 1939, l’a”,c 2

"X0 parson sh:\ll

bo roquulrod

to lint or rondor a .;rontor

portion of ills orcdits tluin

ho bolievoo\:ill bc receivedor can bo collcotod,or to include in his otatozontns a pnrt OS !iio poroon?l pronortywhich is rcquirodto.bo list& nny sliaro or portion OS the ClliJitnl otook or property of My ooa~~ny or ocrporntion \;jlioh is required to list or return its cnpitol and >roporty for tuxntion." .

, iinvinz record for tile

co~orato fiction, a tax on s!,arcs. of stock in iho h:indn OS the holder ii1

addition to n tax on t::o propertyOS tho corporationin the hands OS tha corporation would not be double taxation. Bovzvor, tho lo[;islstivo bodios OS many . ' Stateshave reoognizedthat to all prnotiaalpurposes it would bo , :.-,:: ', doubly taxing the property of the oharoholdor and hnve enacted ~' 'Legislation

cxemptin(:

the shnros of stook vfhon the propertyOS 1, ~;,,-.j .i‘ the corporationis taxed to the corporation. !Pho oourts unhositat- ;.:~ ,I: in$.yuphold the exomption when 1oCislntivs

bodies hove proparly : ,') evidoncodtheir intont that suoh oxoaiption shall bo mado. ;&usf, 55 R. E. 829, Ohio; Hubbard - :. .:,[ Commcnvoalth

v. FidelityTniat.Co., '-.' L). *. 1037, Kg.; Stat0 v.'Lonch, 144 Z. 6. 290, Us., :,i;;: '!' At least one court, in a t;tnto vrharc the oourts had hold,‘i"1 thatdoublo taxationwas forbiddenby tho constitutional proviaion~ /~~~ yzr:.~m :;;:I,~ : requiring

uniform taxation,outs through tho corporatoSiotion-nnd :,~. ,~,',:ijI ;,' ./ held that on attempt to tnx charesin a Soroi&n corporation would * '~3 be unconstitutional, v:h;horo suoh corporation's Droportyx39 loonted and taxablewithin the atnto. Stroh V. City OS Dotroit, 90 ir'. Y.. ,,,:'! 1029, Suprome Court of KiohiCannn. ,/'~' '~.~~ /~ ,, i, :I'

Other oourts, rcmnrkinGupon the harshnonsor taxin I. ; both the shcros of stock and the oor?ol~ato property,have said that -'i boforo the courts should pamit the s::riia the lseislativeintont . to do so should bo most plainly maniSost. Bd. or Gom'rs of &la. County v. Rjran,

232 Pac. ,834,

Okluhoiqa., I in Gillo~ie v. Gnston, 67 Tns. 599, 4 j. ';i. 248, it MB hold that 'thoowner of stock in n stnto b&n;- v:as not taxable t:horo- / viith, v;hila the property oS.thc bank was taxnblc (as the law than was), althoughthe bank did not return its progcrty fortaxation ns it should hove dono.

As noted above, Artiola 7162., Cot. 30, rcqufros the listing

of all shares in.oorporutions orgnnizodunder the IaVis OS otherstntoo. ,,' ,con. iL?.rold ;:cCmckan,Janunry 30, 1939, P5Ce 3 I

Since Article 7102 thus exanpto '~oharas in Tax55 aarpara-:~,:~,::~.,:1_-:;I,j:;, tianc,tho sax3 wniLQ have no need far AM.010 7lG3~ to &r*F:ant

the23 -:.

!~L.:.:~~ further

axauption. .' : 'LddmuslnC our5alve5 .%rthar to ~~rtiale 7163: "X0 peroon ,: f.,.'. ': :::I-~ : shall ba requirad

. i

. to include in hi5 stntozient 85. a part of : 1'~: i,',~~.': hispereoxl propartywhich ,ls racuired to ba lletad (this cnnnot~,~~,.:,:,:,~.i,:;': -- refcx~ to nhmes. in a domastic cor~aratio~~n:iy?TiiEor portioti 'or :::::::-::1'~~~~~ the ccpitnl ctock

. . . of any caqm-ation v:hlch 3.5 zequirod to ~" listor roturn it5 capital ond pxaparty for~taxation." ,'.?:r,;~:;: ,sj ~.I ~_,,I

'.:,.,:: This urticlavrnn

evidently intended to grmt to tha amer cf ctock in Q corporation or~zuisadundar the la::5 of 5ana otlmrstate the sme exemption 55 Article 7162 hod Clven to the holder of stock in a 'Yc:~cO corj?orLKo::,

T;?mn 511 t,ho

groparty of : 5uahforciCn caq)omtion is located fuS randared for taxation in the &ate of %ras. Icdoodw cm a00 no ronmn vihy .tha Loy,,5ln- ” turoshould

~lmvo?Lahod tc aroota any \Iincri~:Lnntioii batvrean~~the twounder ouch condltlono.

ThcL ntock you daocribe frills oquaralywlthiu the exenption provldod

in Article 71$3 und io not oubjoat to tha'ad valorea tax. ;~tion 43, of hrtlcla 7162, ror.uires the li5tiw;of the valueof "all athor propartynot enumrntoci nbova.* If thi5 j * brocdlnnr;unCa

bo !?cld

to includa n!lzra5

in c doslootfo,

couccm, * tktn tl;o

holdorc OS 5tocks in forcl;;n and do:~sZid ccr?omticno \:ould bc on 00~ucl

tarz.5 in tha stctuLc5. &tic105 71GL and 7163 ' ~:auld be iqzrticlly e:qU.ceblo an6 Gillaopiov. G:l~ltao.,.~:apm, would -, control

in either oven%. Tha rmcindcr of thi5 opinion,howvm, ~I11 be bcndd upon t110

ccsu;::pti0:1

t.lint cir?cc &xt:.m LX!

c~oc;ficr,lly

cnllcd for the lic,tlnS

of chnrao in Sorei@ aornorctianc, the Ceuaral lfal~uage y ,:i~ af Section43 would not inalude utacks in do:daslia corwrutions. ":~.

-;~,,:.