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., 1st C.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 7 of the 

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, of the 

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 of the 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. 3 that are “occupation taxes” must 

be set apart for the benefit of the 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. 99 S.W. 157 (Tex. Civ. ADD. 

State v. Humphrey, 159 $g. 2d Id2 (T&. Civ. App:’ 

1941);‘mDovis, Inc. v. State, 142 Tex. 637, 180 S.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 81 South Dev. 

o. v. Shannon, 115 S.W. 361 (Ttx. Civ. App.m; 

tk .CO. v. Sheppard, 219 S.W. Ld 1010 (Tex. 

. T 1 Ry Portmxi Cement Co. v. State, 

jT:CI Am IWO) Texas Consolidated 

Tramp. Co. v. State, 21oV*fJ.W.id 891 ‘(T Ci A 194EJ; 

C&b v. HarQin+vk, 144 Ttx. 360, 190 Sf.2dv;90p(?$45); 

~octtht~~ RtaIty Corp. v. McCallum, 65 F.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. 113 S.%‘.Ld 

ii9 (Tax. Civ. App. 1938; &t k. Coo er 13dT 

ht.; 

A. 433., 

110 S.W.Zd 696 (1937); Sec.37J-uOL, c Attorney 

f38Urbl’t @pinions O-4731 and O-4847; Edward Brown &I 

Sons v. McColgan. 128 P.2d 186, 53 Cal.App.Zd 504. 

SUMMARY 

One fourth of the revenue collected by virtue 

of H.B. No. 3, Slst Leg., 1st C.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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