Hon. Robert S. Calvert Comptroller of Public Accounts Austin, Texas Opinion No. V-1027. Re: Classification of the taxes levied by H.B. No. 3, Acts 51st Leg., 1stC.S., to determine which are occupation taxes. Dear Sir: Your letter requesting our opinion relating to the above captioned matter reads as follows:

“Article XIV of House Bill Number Three, Acts of the First Galled Session of the Fifty-first Legislature, provides in part as follows:

“‘THE STATE HOSPITAL FUND is created hereby. All revenue and funds derived under and by virtue of the provisions of this Act, save and except any portion required by Section 3,Article 7ofthe Constitution of the State of Texas to be set apart for the benefit of the Public Free Schools, shall be paid into such STATE HOSPITAL FUND,onything in this Act or any other law of this State to the contrary notwithstanding.’

“I shall thank you to set out in detail, ofthe revenue and funds derived under the above named Act, that portion required by Section 3, Article 7 of the Constitution of the State of Texas to be set apart for the benefit of Public Free Schools.“ Section 3, Article VII, Constitution of Texas, provides:

“One-fourth ofthe revenue derived from the State occupation taxes.
. .shall be set apart annu-,, ally for the benefit of the Public Free Schools;.

. . It follows that one-fourth of the revenue collected upon the taxes levied by H.B. No. 3that are “occupation taxes” must be set apart for the benefit ofthe Public Free Schools.Hon. Robert S. Calvert - Page 2 (V-1027)

The following in our opinion are occupation taxes: Oil production, aas production, sulphur production, telephone gross receipts, gas, electric and water company gross recoipts, carbon black production, cement distributors’, motor carrier gross receipts, oil tie11 ,servicing, insurance gross receipts, **and** chain store.

The following in our opinion are not occupation taxes: Motor vehicle sales and use, liquor and wine sales, franchise, new radio, television sets, cosmetics and playing cards sales, stock transfer, and beer sales.

**Our** opinion is based on the following authorities: Producers’ Oil Co. v. Steohens. 99S.W. 157(Tex. Civ. ADD. State v. Humphrey, 159$g. 2d Id2 (T&. Civ. App:’ 1941);‘mDovis, Inc. v. State, 142Tex. 637, 180S.W. 2d 429 (leliver Iron Mining Co. v. Lord, 262 U.S. 172,43 9. Ct. 6&6’m2) Dallas Gas Co. v. 5 ;tate,261 S.W. 1063 [l)Zl): State Tai Commission v. Hughes Drug **CO.,** 293 S.W. 924 [Ky. Civ. Ann.m: UnitedNbrth 81South Dev.

o.v. Shannon, 115**S.W.** 361(Ttx. Civ. App.m; tk .CO.v. Sheppard, 219S.W. Ld 1010(Tex.

.T 1Ry Portmxi Cement Co. v. State, jT:CI Am IWO) Texas Consolidated Tramp. Co. v. State, 21oV*fJ.W.id891‘(T Ci A 194EJ; C&b v. HarQin+vk, 144Ttx. 360, 190Sf.2dv;90p(?$45); ~octtht~~ RtaIty Corp. v. McCallum, 65F.2d 934 (1933); W88f8rn Co. v. Slm 850 (Tex. Civ. App. 5 Enainetrinn Co.. 208 S.W.2d 656

Lee Tiis. Co. v. Love, urt v. **Coowr.** 113S.%‘.Ld ii9 (Tax. Civ. App. 1938; &t k. Coo er 13dT ht.; A. 433.,

Attorney 110S.W.Zd 696 (1937); Sec.37J-uOL, c f38Urbl’t @pinions O-4731 and O-4847; Edward Brown &I Sons v. McColgan. 128P.2d 186, 53Cal.App.Zd 504. SUMMARY One fourth of the revenue collected by virtue of H.B. No. 3, Slst Leg., 1stC.S., 1950, from the followirq ttrts, viz., oil production, gas production, sulphur producLion, telephone gross receipts, gas,Hon. Robert S. Calvtrt - Page 3 (V-1027)

electric and water company gross receipts, carbon black production, cement distributors’, motor carrier gross receipts, oil well servicing, insurance gross receipts, and chain store, must be set apart for the benefit of the Public Fret Schools, as such taxes are occupation taxes. Section 3,Article VII, Constitution of Texas, Yours very truly, PRICE DANIEL Attorney General

APPROVED: Charles D. Mathews Executive Assistant BY Assistant

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