OFFICE OFTHEAnORNEY GENERALOFTEXAS 

AUSTIN 

-‘m c. MANN 

*-” .s*- 

Honorable Porn L. Eaauahamp 

Gaoretary 0: State 

Austin, Texas 

Dear sir: Attwition: 

in whfoh ym reqneat the 

tw rquowing iaots and 

ona&h 10, 19s9, 

a dommtio oharter 

**o&d b;r the rartgagor 

insWlments. Iour letter 

ressntlng the amendaeno te 

r, the atfldatlt~ aooonpanramendmnt reolte~s that tu 

.Twmrs fiotel Oom@sny he8 title 

to the aroreaald propdty, wh.io3.1 pro; 

pertp Is of the oash ~al.ua of @350,&30 

over and above the flxet mmtgage loan 

or #SEA5 ( 0.00. This affidavft further 

reoltie thst the $25O,OOQ valuation is 
iIonorable Tom L. Beauchamp, Pa*- 2 

carried on the corporation's books as 

~150,000 to the capitol stq..ak a,ocount 

of 9100,000 credited to th'ii ln$etment 

account or ourplus of such oompany. 

This office required the paymente of 

a riling fee of $190 for filing the amendment to the charter, and in aadition thereto required the payme t 

rranohise taxes oovering the pe i 

of 

lad 

from May 4, 19259, through April Jo, 

19&O, based upon the capitol st6ok of. 

150,000 BL~ 

1 P. 

she rurther amount of 

525.000 e fhmoed by the note outat&uU&+igalnat the corporate propsrw- 'The only question whloh has 

arisen relates to our charge at this 

tlPur ot thm addltlonal amount ot tranoblae tax baaed upon mtetemant ,oontalnad 

In t&~ iimendmont to th, oharter uhloh 

wan $hie.day tiled.* 

The iollowlng questions dare eubmlttsd for oar determination: 

"1. Under the oimmwtanoei outlined above Is the Ssorotary of State 

authorized to ~requlra the oorporation 

to pay a supplemanta tranohlse tax 

ooverlna the rraotloaal wrtlen or the 

~erfr~ May 4; 1939, t&rou~,Aprll 

. 

"2. In event the above question 

1s answered in the afflrmatlve, upon 

what portion of the oar oration's oaplto1 assets of $575,000 7 repreaentsd by 

Its authorized and paid In oapltol 

stook of 8150,000, its eurplus as stated 

in its oharter amendment of $100,000, 

and the amount of $325,000 represented 

by the remaining value of the property 

subdeot to the note ereoutsd by Ollff 

Tower8 Corporation in said amount of 

$925,000) are we entitled to use as a 

basis for determining the amount of tax 
Xonorublu Tolo L. Eesuchnmp, Page 3 

tiue by it? 

“3. In the event question number one 

is answered in the negative, and assuming 

there is no further ohange in the Zinanoial 

status o? the corporation's aapitol stock, 

then upoo what portion o? said $375,000 

should the tar due I&y 1, 1940, be based?" 

You lndlaate that the taxpayer has paid the tax 

under protest as provided in Artlole 7057-b and the loonay is 

being held in suspense awaiting the detsna%nation o? these 

questlone. 

Artiole 7084, Revised Civil Statutes, 1925, provldea in part as hollows: 

“(A) Fzoept as herrin provided, every 

domastio and foreign oorporation hereto?Ore 

or hereaiter ahartsred or orccanl%od to do 

business ii l'e 

roii0ang . . 

Artlale 7086, Revised Cltll~Statutes, 1925, provldee as iollowei 

nNhenaver a private domsstio oorporation is ohartered in this state, . . . 

suah oorporatlon shall be cequlired to.pay 

in advanoe to the Seoretary o? State, as 

it8 rranohlse tax rmpl that tIma down to 

and inoludlng the 50th day o? April next 

rollo~ing, only suoh proportionate part or 

Its annual iranohlse tax, as hereinabove 

prescribed, as the period o? tlaxe between 

the date or its riling of its artloles of 

lnoorporation . . . and on the first day 

of May iollowing, bears to a oalendar year," 

Artials 7089. Revised Civil Statutes, 1925, aontains the ?ollowlng provisionsi 
Honorable Tom LL Baauolmmp, Paga 4 

"Exxcept as heraln prodded, all oorporations now required to pay an annual 

franchise tax shall, between January 1 

and ikroh $5 of each year, make a aworn 

report to the Seoreterp of State, on 

blanks furnished by that oftloer, ehowlng 

the aozdltlon of such oorporatlon on the 

last day or its praoading tiaoal year. 

The Seoretary Of State may iOr good oause 

shown by any oorporatlon sitend suoh tlzse 

to any date up to Mshp 1 . . .* 

Artlole 7092 provides In part es follows: 

"The Seontary of State ahsll, durlag 

tha mnth 0r Uey or eaoh year, 00ti.ry eaoh, 

domastlo and ?oraIga aarporatlon whloh smy 

be or baooma aubjaot to a ?ranOhlaa tax 

under any law of this stats, whloh has 

failed to pay auoh franohlsa tax an or bafore the rlrst day 0r my, that unleb~ suoh 

overdue tax tog&thar with aaid penalty theraO? shall be paid on or berora the first dq 

of July next followIng,'the right of atioh 

oorporatlon to do buslnaaa In this state 

will be torfaltad without judlolal aseertalment~. :. -." 

The above atatutea olaarly establish that when Oli?? 

Towers Hotel Cornpang was lnaorpomtod on Maroh lQ, 1939, ltwe8 then due a rranohfse tax for the period from Maroh lo., 

1939, to April 30, 1939, on its oepitol atook and anoh tax 

was dua upon the filing of its ohm-tar- The ~rranohlae tax 

for the.yaar 1940 was due and payable on May 1st of 1939, 

based upon its outstanding oapitol atoolc, surplus, eta, 

prior to aEay 1, 1939. The next franohiae tax due by tMs 

oorporatlon will be based upon Is outstanding oapltol atook, 

surplus, eta., on the last day of Its risoal year next praoedlng Msy 1, 1940, ani till be payable in advanoa on the 

last me@loned date ror the franohiae tax year 194%; 

Although the oharter amendment was filed on Nay 4, 

1939, during the franohlse tax year~l94.0, the rranohlw taxes 

for suah year were already due and payable based upon the 
iionorablc Tom L. Beeuchamp, Tase 5 

capitol structure prior to Xay 1st and the filing of the amendment would not affect the rmount of tax due for that year. 

Prior to 1930, Artlole 7091) ii. C. S., 1925, provided 

68 follov:s: 

"In the event of increase in the authorized capitol stook of any domestio or foreign corporation, it shall also pay in advance a supplemental franchise tax thereon 

for the remainder of the year down to and 

Inoludlng the 3Qth day or April next thereafter, the amount of whioh shall be dotermined a.8 ie provided In the third artlole OS 

this ohapter in oaae of the firat iraaohlse 

tax payment to be made by a domestic oorporation whIoh may be hereafter authorized to 

do buainses nithln this state," 

This statute wae repealed by Aots, lOSO, 4lrt Leglslature, 5th 0. S., page 220, Ch. 68, Seo. 1. 

. 

W-a hive been.unable to'rlnd any rurther atatutoa 

authoriai+g the oolleotion of a eupplementaltranohlee tax. 

upon filing a oharter amendment, and by the reppal of the above quoted statute it was evidently th8 intention ot the legIcllature that :a mpplemental franchise tax ehould no longer 

be paid under these olroumetanoea. 

We, therefore,,answer your first queetlon in the 

negative. 

Having anawered your first question In the negative, 

your seoond question does not require an answer. 

As pointed out above tha iranohiae tax due on May 1, 

194C, In advance for the year 1941 will be based upon the oorporate atruoture as of the last day of the flsoal year next preoeding May 1, 1940. This being true its present oapltol attruoture ~511 not in any way beocme a raotor in oaloulatfng the 

amunt of tax due for the year 1941 and your third questlon 

may not materialize. We reoognlze that in submitting your 

third question you might have also had in mind oorporatlone 

similarly situated with reapeot to-this year's tax and a present answer Is desired. If this is true we reepeotfully 
lionorable Torn L. B8aUChmp, Page 0 

request that you resubmit your third question and we shall be 

glad to give it our further consideration. 

Yours very truly 

ATl!OE..Y GEIERAL OF T%X&3 

BY 

Aaalstant 

cccrn 

APPRiX'liD~ 24, 1939 

ATTOBWBY .GliXItML OF !mxAs