_ - 

### R-379

**May 8,**  

### 1947

Han, C, E, Patterson Opinion No. 

### V-193 County Attorney Brewster County Re: Taxation of wool in govAlpine,Texas ernmentwarehouseson consignmentfrom rancharc,
Dear Mr. Patterson:

You present for the opinion of this Department in your letter of April 15 

### 1947,the question of whether or not wool in Federal bovernment Warehousesao of January 1st is oubject to ad valorem taxes for that year; and, if 80, upon whom the duty rests to render and pay the taxes, i.e.,whether the rancherwho produced and consignedthe wool to the warehouseor the warehouseman.

-ðer the wool under.the circumstanceacovered by your letter is the propertyof the producer, the rancher,or the government warehouse involve8an issue of fact which is beyond our provinceto pass upon and which we will not attsrpt tom resolve. We will aosume, however for the purpose of this opinion, that the wool remains the property of the producer until it is appraisedand in fact sold at a pricemutually agread,uponbetweenthe producer and the Federal Government. Based upon this assumption, we are'of the opinion that until such oale is consummated the wool remains in the hands of the producerand is a farm product specifically

exempt frem taxationby virtue of Article VIII, Section 19, of the State Constitution adopted in 

### 1879,which reads as follow&:

'?Farm products in the hands of the producer, and family supplies for home and farm use, are exempt from all taxationuntil otherwise directedby a two-thirdsvote of all the members elect to both houses of the Legislature. (Set, 

### 19, Art, 8, adopted electionfirst Tueo- ' day in September, 

### 1879eIW 1879; proclamation Octcber 14,Hon, CO E, Patterson - Page 2, v-193

We think that wool does constitute a "farm productt',

and its storage in a government warehouse pendingultimate sale does not preclude its being "in the hands of the producereD

Literally tivation of the soli. farmingmeans the tillage or culBut., as saidby the court in the -e,o;p;r;tJw~~ & jJq$$ f$yy~ @fag;"" l%ikemany words 'compoundld of differ&< &.ements it has the meaning of its own broader than that of thi elements consideredseparately;for from time immemorial it has been regarded as synonymouc with husbandry and the soil and the in the crops and

earliest7ZFeZ7

We continue to quote from this case as follows: "But, where the milk sold is producedby cattle kept on the farm as a part of its operation,the busineas of produc

9 and selling it lo necessarilyan agriou1tura.l.

pursu t, for the productionof milk from cattlewhich consuma,thecropo grown on the farm ie as

ductionand sale of wool is producingan agricultural or farm product. Ao long es such wool remains unsold by the ranchman it is a farm product in h a hando'and as such is specificallyexemnt under the. 4- oregoingprovision of thi)

Constitution.- The Legislaturehas never by two-thirdsvote of all members of both Housea imposeda tax upon farm products "in the hands of the producerno

This constitutional exemptionfrom taxation would not apply,

to wool that has passed out of the handoHon. C. E. Patterson,Page 3, V-193

of the producerby sale or otherwise,for it is exempt only "in the hands of the producer". If in fact the wool has passed out of the hands of the producer by sale to the Federal Government,then it would not be taxable unles~s

Congresshas specifically permittedthe State to tax it. The State has no authorityto tax property owned by the Federal Governmentso long as it insists upon its immunity.

If we assume that there has been a completed sale and thewool has in fact become the propertyof the Federal Governmentand as such continued in storage in the Federally owned warehouses?we know of no Congressional action waiving the immunityof the Federal Government from State taxationunder such circumstances.

If, however,a sale of the wool has been made to a purchasernot itcelf entitledto claim immunity from taxation a differentrule would apply and tax liabilitywould begin as in the sonal property,for it would no of the producer"as provided,by 19 of the Constitution. case of any other perlonger beninthe hands Article VIII, Section

SUMMARY Wool stored in Federal Governmentwarehouses by ranchmen,but not actually sold, is specificallyexempt from ad valorem taxes by virtue of Article VIII Section 19 of the Constitutionof this State, as a farm product in the hands of the producer, If it actually has been sold to the Federal Government,it is not subject to ad valorem taxes by this State, in ;;e absence of Congressional action permitting

. Yours very truly," ATTORNEY GENERAL OF TEXAS

ATTORNEY GENERAL Assistant .. ..s (

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