Hon. George H. Sheppard Opinion No. O-2304

Comptroller of Public Re: An individualwho owns tank Accounts cars in which,he transportshis Austin,Texas own gasoline andwho does not lease, rent or chargemileage for said cars is not required to make the reports or pay the occupation Dear Sir: tax under ,Art.7062.

This is an answer to your request for an opinion in which you say:

"An individual,residingwithout this State, owns a certainnumber of railroad tank cars. He loads themwith gasoline at Sweetwater,Texas, for delivery to a certain oil company in Fort Worth, Texas, and pays the freight himself, at Fort Worth. He receives the benefit of themileage allowance under regularlypublished tariff authorizedby orders of the InterstateCommerce Commission.
"Is this individualrequired to make reports and pay the gross receipts tax under ,lirticle 7062, R.C.S.?"
In a secondletter on this questionyou gave us additional facts as follows:

"The owner of a tank car loads said car at Sweetwater,Texaswith gasoline and makes out a bill of lading on same for delivery to himself at Fort Worth, Texas, the Texas and pacificRailway Company moving said car as per bill of lading. The Texas and pacificRailway Company then presents freight bill at the destinationunder the rates and terms of regularlypublished tariffs of the InterstateCommerce Commission. "iit regular intervals, the Texas and Pacific Railway Company under regularlypublished tariffs of the Intersta e Commerce Commission,pays to the

c owner of said tank car the equivalent of l& a mile for each milewhich said car traveled loaded on lines of said railway."Hon. George H. Sheppard,page 2.

,As we interpret the facts, these tank cars are used to transport only the owner's property. The owner loads the car at Sweetwater and the railroad companymoves the loaded car to Fort Worth, where the owner pays the freight on the load at the same rate as if the property had been transported in the railway company's own car. At regular intervals the railway companypays the owner of these cars l&? a mile for each mile itwas used, that is, traveled,while loaded.

The answer to your questionmust be determinedby the constructionto be placed onArticle 7062 of the Revised Civil Statutes,which reads as follows:

Viach individual, company, corporationor association,residing without this State, or incorporatedunder the laws of any other State or territory, or nation, and owning stock cars, refrigeratorand fruit cars of any kind, Q& a s of any ku, coal cars of any kind, furniisa;iars or common box cars and flat cars,& g. renting or chargingmileane for the use of such carswithin the State of Texas shallmake quarterly,on the first day: of January, April, July and October of eachyear, and report to the Comptroller under oath of the individual or of the president, treasurer or superintendentof such company, corporationor assocation, showing the amount of gross receipts from such rentals, or mileage, or from other sources of revenue received from business done within this State, during the quarternext preceding. Said tndividuals,companies and corporations, and associations, at the time ofmaking said report, shallpay to the Treasurer of this State an occupation tax for the quarterbeginning on said date equal to three per cent of said gross receipts as shownby said report." (Underscoring ours)
Itwill be noticed that the part of the statutewith which we are concerned says that "each individual

... owning .e. tank cars of any kind

... and leasing, renting or charging mileage for the use of such carswithin the State of Texas" shallmake the required reports and pay the prescribed occupation tax. Under the facts that you have given us the Individual owns tank cars. But, is he engaged in "leasing,renting or charging mileage for the use of such cars"? 'Wethink the answer IS "No"._,. -

Hon. George H. Sheppard,page 3.

It is true that the owner of the cars is paid a sum of money by the railway company that transports the cars at a rate of so much per milewhile loaded; but,we do not believe this is an arrangementby which it can be consideredthat the owner is leasing or renting the cars to the railway company. Nor dowe consider that the owner is chargingmileage for the use of the cars. @hat it amounts to is this: The individual in question furnisheshis own cars to haul his ownproperty, and, of course,he is entitled to pay a less transportation charge to the railway than he would be if the railway furnished the cars; and instead of paying a smaller freight rate, the individual in this case pays the same rate that he would pay if the railway furnished the cars and the railway in turn hands him back l& per mile.

If the railwaywas allowed to haul other people's merchandise in this car-owner's cars, and said car-ownerwas paid l&2 per mile by the railway for so using the cars that would constitute "leasing, renting or chargingmileage for the use of such cars";but, we understand that these cars are used only to haul the car-owner'sproperty.

This statutewas apparently intended to apply to car ownerswho leased and rented their cars to others or turned their cars over to other persons and charged mileage therefor, for such other persons to haul their (said otherperson's)merchandise or haul merchandise for hire as a common carrier. We do not believe itwas intendedby the legislature that this statute apply to cars used exclusivelyfor hauling the carowner's olin

property.
Our answer to your question is that under the facts that you give, the individualyou ask about is not required to make reports or pay the gross receipts tax under Article 7062.

Enclosedwith this opinion is the correspondencethat was attached to your opinion request.
APPROVEDJUN 11, 1940 /s/ Gerald C. Mann ATTORNEY GENERAL OF TEXAS APPROVED:OPINION COMMITTEE BY: BWB, Chairman CCFl:kd:wb enc. Yours very truly ATTORNEYGENERAL OF TEXAS By /s/ Cecil C. Rotsch Cecil C. Rotsch, Assistant