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

Comptroller of Public Re: An individual who owns tank 

Accounts cars in which,he transports his 

Austin, Texas own gasoline and who does not 

lease, rent or charge mileage 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, residing without this State, 

owns a certain number of railroad tank cars. He 

loads them with 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 the mileage allowance 

under regularly published tariff authorized by orders of the Interstate Commerce Commission. 

"Is this individual required to make reports 

and pay the gross receipts tax under ,lirticle 7062, 

R.C.S.?" 

In a second letter on this question you gave us additional facts as follows: 

"The owner of a tank car loads said car at 

Sweetwater, Texas with gasoline and makes out a bill 

of lading on same for delivery to himself at Fort 

Worth, Texas, the Texas and pacific Railway Company 

moving said car as per bill of lading. The Texas 

and pacific Railway Company then presents freight 

bill at the destination under the rates and terms of 

regularly published tariffs of the Interstate Commerce Commission. 

"iit regular intervals, the Texas and Pacific 

Railway Company under regularly published tariffs 

of the Intersta c e Commerce Commission, pays to the 

owner of said tank car the equivalent of l& a mile 

for each mile which 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 company moves 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 company pays the owner of these cars l&? a mile for 

each mile it was used, that is, traveled, while loaded. 

The answer to your question must be determined by 

the construction to be placed on Article 7062 of the Revised 

Civil Statutes, which reads as follows: 

Viach individual, company, corporation or 

association, residing without this State, or 

incorporated under the laws of any other State 

or territory, or nation, and owning stock cars, 

refrigerator and 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 charging mileane for the use 

of such cars within the State of Texas 

shall make quarterly, on the first day: of January, April, July and October of each year, and 

report to the Comptroller under oath of the individual or of the president, treasurer or superintendent of such company, corporation or 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 quarter next preceding. Said tndividuals, companies and corporations, and associations, 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 equal to three per cent of said 

gross receipts as shown by said report." (Underscoring ours) 

It will be noticed that the part of the statute with 

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 cars within the State of Texas" 

shall make 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"? 'We think 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 mile while loaded; but, we do not believe 

this is an arrangement by which it can be considered that the 

owner is leasing or renting the cars to the railway company. 

Nor do we consider that the owner is charging mileage for the 

use of the cars. @hat it amounts to is this: The individual 

in question furnishes his own cars to haul his own property, 

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 railway was allowed to haul other people's 

merchandise in this car-owner's cars, and said car-owner was 

paid l&2 per mile by the railway for so using the cars that 

would constitute "leasing, renting or charging mileage for the 

use of such cars"; but, we understand that these cars are used 

only to haul the car-owner's property. 

This statute was apparently intended to apply to car 

owners who 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 other person's) merchandise or haul merchandise for hire as a common carrier. We 

do not believe it was intended by the legislature that this 

statute apply to cars used exclusively for hauling the carowner's olin property. 

Our answer to your question is that under the facts 

that you give, the individual you ask about is not required to 

make reports or pay the gross receipts tax under Article 7062. 

Enclosed with this opinion is the correspondence that 

was attached to your opinion request. 

APPROVED JUN 11, 1940 

/s/ Gerald C. Mann 

ATTORNEY GENERAL OF TEXAS 

APPROVED: OPINION COMMITTEE 

BY: BWB, Chairman 

CCFl:kd:wb 

enc. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By /s/ Cecil C. Rotsch 

Cecil C. Rotsch, Assistant