Honorable Robert S. Calvert Opinion No. C- 47 

Comptroller of Public Accounts 

Capitol Station Re: Under the submitted 

Austin, Texaa facts, whether the 

Qross Receipts Tax 

provided for by Article 11.03, TaxatlonGeneral, Is due by 

the stated corporaDear Sir: tlons. 

This Is In answer to your request for an opinion concerning the above subject matter and in connection therewith 

you have given us the following facts: 

"Qross Receipts Tax audits have been 

made of the records of Caruth Corporation and Hillside Corporation, both of 

Dallas, Texas. Caruth Corporation owns 

and operates the Inwood Shopping Village, 

Dallas, Texas, and Hillside Corporation 

owns and operates Hillside Shopping Center in Dallas, Texas. 

"Caruth Corporation purchases electricity from Eellas Power and Light Company, gas from Lone Star Gas Company, 

and water from the Dallas City Water 

Works, and resells same to Its tenants 

in the shopping center through lndlvldual meters and at a profit. 

"HIllside Corporation purchases electricity from Dallas Power and Light Company 

and resells same through individual 

meters to Its tenants In the shopping 

center at a profit. 

"The Gross Receipts Tax is paid by Lellas 

Power and Light Company, and by Lone Star 

Gas Company, based on their charge to the 

corporations. 

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Honorable Robert S. Calvert, Page 2 (No. C47) 

'The Dallas City Water Works, being munlclpally owned, Is not required to pay 

Qross Receipts Tax." 

"The 'Hillside Corporation 

"Sells electricity only 

(1) E,',';s Power & Light owns Master 

(2) Hillside Corporation owns transmission lines from master meter to 

tenant's store. 

(3) Hillside Corporation owns meter at 

tenant's store. 

(4) Hillside Corporation serves approxlmately 30 tenants. 

"Caruth Corporation (Inwood Village) 

"Sells gas, electricity, and water to 

tenants. 

Lone Star Gas, Dallas Power & Light and 

Dallas City Water Works owns Master Meter 

at Caruth Corp. property line. 

(1) Caruth Corporation owns all laterals 

and lines which furnish utilities to 

tenants. 

(2) Caruth Corporation owns all meters at 

tenant's store. 

(3) Caruth Corporation serves approximately 40 tenants or customers." 

The question to be determined Is whether or not the 

business or operation conducted here constitutes a gas, 

electric light, electric power, or water works, located 

within any incorporated town or city In this State, and 

used for local sale and distribution In said town or city, 

as provided by Article~l1.03, Title 122A, Taxation-General, 

Vernon's Civil Statutes, the pertinent part of which reads 

as follows: 

"(1) Each Individual, company, corporation, or association owning, operating, 

managing or controlling any gas, electric 

light, electric power, or water works, or 

water and light plant, located within any 

incorporated town or city In this State, 

and used for local sale and distribution 

in said town or city, and charging for 

such gas, electric lights, electric 

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Honorable Robert S., Calvert, Page 3 (No. C-47) 

power, or water, 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, or of the president, 

treasurer or superintendent of such 

company, or corporation, or assoclatlon, showing the gross amount received 

from such business done In each such 

Incorporated city or town within this 

State In the payment of charges for 

such gas, electric lights, electric 

power,,or water for the quarter next 

preceding. Said Individual, company, 

corporation, or association, at the 

time of making said report for any 

such incorporated town or tit 

more than one thousand (1,000 T 

of 

inhabltants and less than two thousand, five 

hundred (2,500) inhabitants, according 

to the last Federal census next preceding the filing of said report, 

shall pay to the Treasurer of this 

State an occupation tax for the 

quarter beginning on said date equal 

to .581$ of said gross receipts, as 

shown by said report; and for any lncorporated town or city of more than two 

thousand, five hundred (2,500) lnhabltants and less than ten thousand (10,000) 

inhabitants, according to the last Federal census next preceding the filing of 

said report, the said individual, company, corporation, or association at 

the time of making said report shall 

pay to the heasurer of this State an 

occupation tax for the quarter beginning on said date an amount equal to 

1.07% of said gross receipts, as shown 

by said report; and for any Incorporated 

town or city of ten thousand (10,000) 

Inhabitants or more, according to the 

last Federal census next preceding the 

filing of said report, the said individual, 

company, corporation, or association, at 

the time of making said report, shall 

pay to the Treasurer of this State an 

occupation tax for the quarter beginning 

on said date an amount equal to 1.997% 

of said gross receipts, as shown by said 

report. Nothing herein.shall apply to 

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Honorable Robert S. Calvert, Page 4 (No. C-47) 

any such gas, electric light, power or 

water works, or water and light plant, 

within this State, owned and operated 

by any city or town, nor to any county 

or water ~lmprovement or conservation 

district. 

"(2) Nothing herein shall be construed to require payment of the tax 

on gross receipts herein levied more 

than once on the same commodity, and 

where the commodity Is produced by 

one individual, company, corporation, 

or association, and distributed by 

another, the tax shall be paid by 

the distributor alone," 

The Supreme Court In Eddlns-Walcher Butane Co. v. 

Calvert, 156 Tex. 587, 298 S.W.2d 93 (1957) Art. 7060 

V.C.S. (now codified as Art. 11.03. Title 62A. Taxa&- 

General; V.C.S.), was held not to-apply to numerous sales 

of butane gas which was stored in two storage tanks within 

the town and was transferred by truck from the place of 

storage to the tanks of the consumers In and around town. 

The Court in its opinion defined "gas works" In the 

following words: 

We hold, therefore, that the 

term'lgas works' means either: (1) an 

establishment In which gas is manufactured, 

produced or processed, or (2) a dlstributlon system consisting of pipes through 

which the gas flows and is delivered to 

the premises of consumers. This construction gives effect to the leglslative Intent as revealed by the language 

of the entire statute." 

In your opinion request you have stated that the 

Caruth Corporation, which owns and operates the Inwood Shopping Village located in the city limits of Dallas, purchases 

electricity from Dallas Power & Light Company, gas from Lone 

Star Gas Company, and water from the Eallas City Water Works, 

and resells same to Its tenants in the shopping center through 

Individual meters and at a profit. It Is further stated that 

Caruth Corporation owns the pipe lines and electric wires or 

cables used for delivering electricity, gas and water from 

the master meter where the utilities are received by Caruth 

Corporation to the premises of the tenants where the utllltles 

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Honorable Robert S. Calvert, Page ~5 (No. C47) 

are dellvered.to the-.:oonsumer. ThIsoperatIon seems to meet 

all the requirements necessary to c~onstltute gas, electric 

light, electric power and water works ae defined by the 

Supreme Court of Texas In the case above cited. 

Hillside Corporation purchases electricity from Dallas 

Power & Light Company and.resells same through Its individual 

electric, cables and meters to Its tenants In the shopping center at a profit. This corporatlonts method of operation appears 

to constitute an electric light or electric power works and It 

Is therefore cur opinion ~that both of these corporations are 

operating In a manner so as to be subject to the gross receipts 

taxes levied by Chapter 11, Title 122A, Taxation-General, V.C.S. 

It Is provided by Article ,11.03, above quoted, that It 

shall not be construed to require payment of the tax more than 

once on the same commodity. 

You have stated that electricity Is purchased from 

Lellas Power & Light Company and the gas Is purchased from 

Lone Star Gas Company, both of which pay the gross receipts 

tax provided above on the amount of money for which they sell 

the electricity and gas to the two corporations here Involved. 

In this case the two corporations which are reselling the 

utilities at a profit would owe the tax on the money received 

for sale of the products which is in excess of the purchase 

price paid by the two corporations. Caruth Corporation purchases water from the Dallas City Water Works which Is munlclpally owned and no gross receipts tax is paid by the city 

on water sold to Caruth Corporation because the statute provides that this tax shall not apply to city-owned water plants. 

When the private corporation purchases water from the city and 

resells the water as in this case, then the water Is subject 

to the tax for the entire amount of the sale price received 

by Caruth Corporation. 

SUMMARY 

Under the stated facts the Caruth 

Corporation is operating gas, electric light, 

power and water works within the meaning of 

Chapter 11, Title 122A, Taxation-General, 

V.C.S., and is subject to the gross receipts 

taxes provided therein. 

Under the facts stated the Hillside 

Corporation Is operating an electric light 

-~-216- 
Honorable Robert S. Calvert, Page 6 (No. C-47) 

works within the meaning of 

and is subject to the gross 

therein levied. 

said Chapter 11 

receipts taxes 

Yours very truly, 

WAGGONER CARR 

Attorney General of Texas 

JRB:pw 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Cecil Rotsch 

Robert Lewis 

Joe Long 

Marietta Payne 

APPROVED FORTHEATTORNEY GENERAL 

By: Stanton Stone 

i217-