i 

OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

January 30, 1953 

Xcnornblo ‘Xarold liaCmokeq 

Civil Dictriot httornoy 

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:, corqmny ws 

hew a pcmit to do 

ock rooidca in 

texotidn. 

Mrioed Civ11 Gtatutao, provldes.in part: 

rortldj ; 

tc -~ nt ahaj.1 truly and Ciatinctlg aot 

"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 received or can bo collcotod, or to include in his 

otatozont ns a pnrt OS !iio poroon?l pronorty which is 

rcquirod to.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 

property OS tho corporation in the hands OS tha corporation would 

not be double taxation. Bovzvor, tho lo[;islstivo bodios OS many . ' 

States have reoognized that to all prnotiaal purposes it would bo , :.-,

'

doubly taxing the property of the oharoholdor and hnve enacted ~' 

'Legislation cxemptin(: the shnros of stook vfhon the property OS 

1,~;,,.i

the corporation is taxed to the corporation. !Pho oourts unhositat- ;.:~ ,I :

in$.y uphold the exomption when 1oCislntivs bodies hove proparly : ,') 

evidoncod their intont that suoh oxoaiption shall bo mado. 

;&usf, 55 R. E. 829, Ohio; 

Hubbard - :. .:,

Commcnvoalth v. Fidelity Tniat.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 

that doublo taxation was forbidden by tho constitutional proviaion~ 

/~~~ 

yzr:.~m : ;;:I,: 

requiring uniform taxation, outs through tho corporato Siotion -nnd 

:,~. ,~,'

;

./ 

held that on attempt to tnx charesin a Soroi&n corporation would * '~3 

be unconstitutional, v:h;horo suoh corporation's Droporty x39 loonted 

and taxable within the atnto. Stroh V. City OS Dotroit, 90 ir'. Y.. 

,,,:

1029, Suprome Court of KiohiCannn. 

,/'~' '~.~~ /~ ,

i, :I' 

Other oourts, rcmnrkinG upon the harshnons or 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 lseislative intont . 

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 'tho owner 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), although the 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 orgnnizod under the IaVis OS 

other stntoo. 

,,' , 
con. iL?.rold ;:cCmckan, Janunry 30, 1939, P5Ce 3 I 

Since Article 7102 thus exanpto '~oharas in Tax55 aarpara-:~,:~,::~.

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,',~~

his pereoxl proparty -- which ,ls racuired to ba lletad (this cnnnot ~,~~,.:,:,:

refcx~ to nhmes. in a domastic cor~aratio~~n:iy?TiiE or portioti 'or :::::::-::1'~~

the ccpitnl ctock . . . of any caqm-ation v:hlch 3.5 zequirod to ~" 

list or roturn it5 capital ond pxaparty for~taxation." 

,'.?:r,;

,sj ~.I ~_,,I '.:,.,:: 

This urticla vrnn evidently intended to grmt to tha 

amer cf ctock in Q corporation or~zuisad undar the la::5 of 5ana 

otlmr state 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 : 

5uah forciCn caq)omtion is located fuS randared for taxation in 

the &ate of %ras. Icdood w cm a00 no ronmn vihy .tha Loy,,5ln- ” 

turo should ~lmvo ?Lahod tc aroota any \Iincri~:Lnntioii batvrean~~the 

two under ouch condltlono. 

ThcL ntock you daocribe frills oquaraly wlthiu 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 

value of "all athor proparty not enumrntoci nbova.* If thi5 

j * 

brocd lnnr;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 Gillaopio v. 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 Section 43 would not inalude utacks in do:daslia corwrutions. ":~. -;~,,:.