GENERAL 

Hon. Gee. H6,Sheppard 

Comptroller of Fublic Accounts 

Aw tin, Texas 

Dear ~78r. Sheppard8 Opinion No. 04068 

Re: Under the faet6 EUhnitted, i6 

the agent of an oil company a %otor 

oarriar" or "contract oar~ier6.liahle 

for th6.gross r606ipt6 tu provid6d in 

Article 7OGCb, R.C,S. of TEX~E? 

YOU present for the Opinion Of thi6 departmsolt tWo qUOEtiOX,E 

which appear atthe oonolusioa of your letter, whio~h we quot6 in full a6 

fOl1OlI68 

“Articl6 7066b, Sec. (a) prolridEE~a6 fOll~61' 

:-~*V,&oh individual6 partnership, company, assooiatl6a. or oorporatiofe doing 

:'bue%&666 a6 a "mator bu6 company" as defined in Chapter'270,~AoLob Boylar 

Seasion of the Fortieth Legislature, as amended bythe Aot6 of 1922; -Et 

Called Se66ion of the For+first Legislature, Chapter 78,'or a6 saotor 

oarrier" or "contract oerriers as defined in Chapter 277, Acts Regular 

Session.of the Forty-seoond Legislature, over and by u6e of the pub110 

~highways of this State, ,shall make quvterly'on the first day of January, 

April, July. and Ootobar of eaoh year, a report to the Comptroller, under 

oath, of the individual, partnership, company, assooiations~or oorporation ,' 

by its president 

ed from intrasta E e business done within thie Stat6 in the payment of 

treasurer; or Eeoretame, sharing th6 gro66, a6Ionnt r6eOiW 

charges for transporting persons for oomR6ncration and any freight 6r oo6n 

modify for hires or from other 6ouroe6 of rwsnu6 reoslv6d fro61 intraEtat.6 

busin66s within this Stat6 during the qUart6r next pmo6ding* Said i+irid- ,, 

ual, partnership, company, assooiation,,or corporation at the' &se Of 

making said reports, shall pay to the State TmaEUmr an OOOUpatiOn taX 

for the quarter beginning on said date aqua1 to trro,alid tW-tenth6 (2.2) 

per oent Of said gross reOeiptS* a s shown w said report. Provided, hw6v6r. 

carriers of persons or property who ar6 required to pay an intangible 

assets tsx under the laws of this State, are hereby exempted from the provision6 of this Article of this Aat.* 

"III defining Hotor Carrier and Contraot C-Wrier6 Soor la of Art. Sllb 

&6+X6: 
?;On, COO. !I. Sheppard, page 2 (C-6068) 

.i 

I.’ 

"*Provided, however, that the term "Motor Carrier" and the term "Ccntraot Ca,riera as defined in t&e preceding section shall notbeheld~ ,'.~' 

to ineltder su&sec, (.s) of the s- se&ion 6+ &ticls . . . pm&d&~?~T~.‘i ‘.- ::.,A.:?:. 

'Where merely incidental to a regular, separate, fixed gnd established 

business, other tban a transportation business, the transportation of 

employees, petroleum products, and incidental supplies used or sold in 

connection with tile wholesale or retail sale of such petroleum products 

fromthe refiner or place of production or place of storage to the place 

of storage or place of sale and distribution to the.ulti,mate.nousumers~ 

in a motor vehicle owned and used exolusivaly by the marketer-or 'refiner,' 

or ouned in whole or in part and used exolusively by the bonarffde oongignee or agent of such single marketer orrefiner, as wellas :.shere 

merely incidental to~<a reylari~~separate, fired and establiqhed ln16lnes6, 

other thana ,transportati% lxxtness, the transportation of petroleum, 

employ?es,,~ mater.ial~:supplies , and equipment for use in the deparbents 

of lttdq~~~~leupl.~~s~e~~:'hy.~~~:~bons fide consignee or agent as used 

heroin being he2leby,defiaed:Pnd,,construed, for the purpose of this Act, 

to mqan~a persc& Underoontr$ct%i.th a single principal to distribute 

petroleum products in a limited territory and only for such single princQx$,,:,..~.,,~..~.~ -:,;c.- ~1;: ,.~I y .! ,.~.?, : z- ::: ~~:, ;. _, ,_ .,. ,in‘;' 

c: L .,. 

- _I. ,., .,*. .,. i :, .I.; ~,. .::. . . . .i::.~, ,-'. 

61 have a ease in mind where's party is agent of one of the majoniJ:hompanics and said agent with his own truck hauls petroleum products from the 

oil ~061~~6 refinery to .hi+wh.olesal:e lbulk st%ation, and th$ oil company 

pays &he agent for such hauls at the same rate as they would pay some other 

___ . 

-~Eq?ntq$ct siotom.,~a@.qp~;: fin makingthe~ba~sto his',- bulk sxatlon or" 

reta$&etation;-&+motor .oarrier.passes through ore contacts t6qo ~ormore 

ih&pornted t%vne*;~ :.: ; .:.t,~ . ,~~ .; ~'~ : 

-~,,,' .~ ..;i. .. '; 

slJn& the o,bn&a~t~w&h the oil.'company+.tbe 6gent is responsibl'e:for: 

the:p~duc:tBfFOrmthe time~~it is 1oaded~:on his truck at the refinery until 

pold. ..? ,, .: '. I! : ,.. .' : . . 

7,~, :-: "I .,^~ ~...: 'j: :, ,- '. r,“- T ':_ 

.-> "Please te1Lm.e &? the motor carrier>~is liable for,the~gross receipts tax 

:,. as .pr,rovjded; f&&n &rt.',7;C66b.' 

,.;~..aPor ~, .I ~,ol~r;co~eniezlce~~you-~ill find.attaoh&eopy of. contract form between; the ;oi.l ~mpanyand.:srpent~? 

L ..!~. :~.;...‘- r _~ ,y,.:,,<. ” ( 

Supplementing your letter you submit certain da&consisting of 

"~&olesale CESSION Agent's Contract," riders to Cosmission Ap@s 

Con~trgct,~"Consi~eg~.~Agre.ement;,'~and whqrt.1~ designated 48 "Sdnedtie A," 

and letter attached thereto, in use by oertain oil companies coreringthe. 

, 
- - 

Hon. Geo. H. Sheppard, page 3 (O-6068) -.. : I <.~ 

operations of their distributing agents, all of which are to be considered 

in oonneotion with this opinion. 

.' 

, hour problem is to determine whether or not the transportation of 

the petroleum products~under the circumstances <revealed in your opinion request 

is taxable under Article 7066b, R.C.S.6 whioh.is a part of the Omnibus Tax ~11 

passed by the 47th Legislature, .xhich is H.B~;6,,6h.. 184, which was approved 

on May 1, $941, a@ beoame efr'ective.on.the- samedate. : 

: :.;; : i,. 

This Article;.as it appears.~in V,RiC; Si reads as follows: 

(Herefollows a verbatum oopy0f: the Artiale:as given on 

pnge:.one of this Opinion and:fs'omitted~here for.brevity) 

. _.,~ .:~ '.. ,‘ 

Legislature, 

The above tax act refers to Ch. 277, Acts, Regular Session, 4&d 

Article:9llb, ~V.R.C.Sb, .for the:definition--Of "motor carriers 

and "contract ~;rrie~":sibject~to~the~:tax~th~l?eby~lmried. We quote said definition from the stat&e referred to:: ,":-': ~.: i:. : 

_ -:~".. ~.: 

"The term Qnotor:aarriar'.means any person;, firms 00rporation,.company, oopartnership, ass6ciatd.on,or joint~stock.assooiatesi~~.andd-their lessees, reoeivers ort.rustees appointed.by aqy.Courtafiatsower,.Bnning, controlling, 

managing, operating:er ,cauaing to be operated anymotorpropelled vehicle 

used in transportitig:properQ~.for compensation:or hcre~.over any publia highway in this:!~tate; wherd~in:the 0ourseof sudh~-.transportation a highway I& 

tieen two or more.indorpprated::citi0s, towns .orvillages, is traversed; 

provided thatthe ters~~~motor oarriert::aa:.ased.fn this Act shall not include 

and this Act.shall notapply, .L &motor vehicle&:operated:emolusively within 

the inoorpoisted limits of cities or~towns.?; -~(Enphdsisours) 

"The term 'contract carrier' mesns anymotoroarrier:as hereinabove defined 

transporting proparty for compensation or hire'overany highway in this 

State other than as a consnon carrier." 

At the same~session of the.Leg~&burethat passed the Omnibus 

Tax Bill, of which the tax act here.under consideration is a part, but at a 

subsequent date, the above.definition'o&a "motor carrier' and soontract 

carrier" was amended eo as to exclude aertain~~type,s of transportation by 

adding the subsedtionsas follows: .'~ .-_ ., ;~ _: f ,i 

; ( ~':,I. .:.. '~ 

"Sec+i.on la (1) Provided,.howeTr&, that~'the~teivn~~!Mo~r Carrier' and the 

term 'Contract Carrier* as defined fin the preceding sect& shall not be 

held to include: 

"(a) Ary persnn'havin;; a re~ular,,sepnrate,~fixed, and established place of 

buriness, other than a 'transportation ~siness,;whBre,-goods, sares, and 

merchandise are kept instock and are prir?arily-and regularly bought from 

the public orsold to~the public ormsnufactured,or',prooessed bw: such person 

in the ordinary course of the mercantile, manufacturing, or processing business,ond who, merely incidental to the operation of such business, transports over the highways of this State such goods of which such person is 

the bona fide owner by means of a motor vehicle of which such person is the 
Hon. Gee. H. Sheppard,,pge 4 (O-6068) 

bona fide owner; nor 

"(b) Anv person transporting fum Implements, livestook, livestook feedstuffs, dairy produots, horticultinal products, floral products, aericultural products, timber in its natural state, or wool and m&air of which 

such person is the bona fide cwner on a vehicle of which he is the bona 

fide owner to an from the irea of produotion and to and from the market 

or place of storage thereof; provided, however, if such person (other +hpa 

a transportation company) has in his possession under a bona fide consignment contraotlivesfook~ wool, mohair, milk and cream, fresh fruits and 

vegetables, or timberinlts natural state under oontraot as an incident 

to a separate, fixed, and established~business conduoted by him the said 

possession shall be deemed ownership under this Act. 

L2!is. 

ere merely incidental~to a regular, separate, fixed, and established 

other than a trans$ortation business, the transportation of emplcyees, pet:oleum products; and incidental supplies used or,sold in connection 

with the wholesale ore retail sale of such petroleum products fromtha refincry or place of produotion or.plaoe of storage to the place of storage or 

place of sale and dietriI.utioq~to-the ultimate consumer, in a motor vehicle 

owned and used exolusivelyby the,marketer or refiner, or wwned in whole er 

in prt and used exclusively by the bona fide consignee or agent of such 

marketer or refiner; as well as where merely incidental to a regular, 

separate, fixed, and established business, other than a transportation business, the transportation of petroleum~employess, material, supplies, and 

equipment for use in.the departments ,of the petroleum business by the bona 

fide owner thereof in a whiole &which he is the bona fide owner; bona 

fide consignee or agent as used herein being hereby defined and oonstrued, 

for the purpose of this Aot, to mean a person under oontraotwith a single 

principal to distriwte petroleum products in a limited territory and only 

for such single principal) * 

Me must of neaessity, in considering the question presently before us, determine whether or not we should be governed by the definition 

of "motor carrier" and'"contraot carrier' as it appears in the original Act 

before it was amended by adding the .two foregoing subsections. The amendment as passed finally by the Senate on May 14, 1941, and approved May 16, 

1941, becani: ~z'feative ninety days after July 3, 1941, date of adjournment. 

This amanclm6~~~ WLS, therefore, passed thirteen days after the Omnibus Tax 

Bill was pass& and approved, and became effective on October 3, 1941, 

following the effeotive date of the Omnibus Tax Bill on May 1, 1941. 

We have concluded that ne must be governed by the definition of 

"motor carrier" and "contract carrier" contained in the original act speoifically referred to in the taxing act. Xe believe the weight of authority, 

and indeed the holding of the Supreme Court of this State, supports this 

conclusion. Sutherland on Statutory Construotion, Vol. 2, page 648, is as 

followsr 
Hon. Gee. H. Sheppard, Rage 5 (O-6066) 

"A statute of apeoific reference incorporatea..t&~.previsions referred ix. 

from the statute as of.the~time of adoptionn~~eut,,eubsequent s,mendmer&s, 

unless the legislature hasexpressly or by strong impltcation shcwn its 

intention to inoorporqte subsequent amendmentswiththe statute. In the 

absence of such intention subsequent amendment of;the‘.referred statute 

will have no effeoten the reference stptuteb-,- #.:.:."* 

Chief Juatioe~Curaton in the ~caee of:fcMer v".Carlton (Supreme Court) 296 S-W. .lOTO, laid dcwn tbe~rule.'aa;feUuwss 

>;;y .-,:!:,,.' ,' :I... : ', : 

"Stat&es uhieh referto oth6r statutes and make $hemapplioable to the sub 

Sect of legislation are.oalled .*reference stafuteq;t and.are a familiar amd 

valid mode of legislation" The-general rule is that when a statute is adop 

ted by a,speoifio descriptive zsPerence,ltihe:,ad?~~oa takes the statute as 

it exists at that time;.and.,the subsequent.~n~~tr.thereoP would not'be 

w within the terms of the-adoptingact. " l '" .:,: I .;': >I.~. 

.: .., 

Hnving,thas~~bon~luded,'ne.rprss to the more&f&cult question as 

to whether or nctdn p9v~c~ent .the LegtdIatuve @&nded.that this tax be dmposed only -apo*,*motor carriers" and ~~~ontrarrt~asrrie~?~~su~jeot toregula-- 

tion by the ,Railroad,.C L%m$i ssion under.~e,ie~ti~ns.~rid by Chr 277, Aete 

of the 42nd LegislatureN in,whioh the erigin&definihionssre feund" Ris Poe 

constrained to the view that the Legislat~.diP.not.~iotend by this referenoe 

to make the imposition of the tsx dependent upca whether or not such "motor 

carrier" and~woontraat.carrier" as therein defrnsd mere subjeat to regulation 

by the Railread'Cemmiasi'on~ There.is-no,Ie~s.sla~~ve~~~esaion in either a& 

making the one .dependent upon the other; ~otie-:is.~a-~regn~atory measure" the 

other a taxing measure. The reference inthe tsxingaotto the regulatory 

act for a definition oP,"motcr carrier" and "contraat oarrier is the same as 

if these definitions had-been incorporated in the taxing aot direct instead 

of by reference. Had this been done, obrriously it oould not be logically 

argued that sn amendment subsequently passed to the regulatory rot l&iting 

the preexisting definition of "motor carrier" and "oontraot carrier" would 

also operate to limit these same terms as defined in the taxing pot" As 

stated above; the.aots oover different subjeots, one regnlat%e8;:%he~.W&er 

taxation. They are not in pari materia" We think the real test is whether 

or not such "motor oarrier" or "contract carrier," p defined in the taxing 

act,, transports propepty for compensation or hire.over any public highway in 

this State where the transportation is over a highway between two or more incorporated cities, towns, or villages" 

Liability for,the tax imposed by virtue of Article 7066b, eupra, 

must first depend upon whether or not the "motor carrier" or "conlraot oarrier" transports for compensation or hire.. Your first question, read in 

connection with the preceding statement made in your opinion request, that 

the agent of one of the major oil companies with his ovntruak hauls petroleum products from the oil oompaqy~s refinery to his wholesale lmlk station, 

and the oil company pays %&I agent for such hauls, at the same rate it would 

pay some other coatraor motor carrier, presupposes that such aa agent is in 
Hon. Gee. H. Sheppard, page S(O-6066) 

effect transporting for compensation or hire. Such being the oases it is 

our oonolusiou that the gross reoeipts received by such agent would be 

subject to the tax imposed by virtue of this article of the statutes. More 

clearly would such au agent, who hauls petroleum produots from the refinery 

to other parties, othorn than his om concern, andreceives oompensatiou or 

hire therefor, is engaged in ~U%SpQr~tiOn as a "oontraot oarrier," and the 

receipts received by him in such oprations would be subject to the tax imposed by virtue of this statute. If we are correot in oux asswption that 

such transportation is oanpensatod for either direotly or indireotly by an 

adjustment ia the prioe,oP the product so transported from the refinery to 

the agent's bulk sales station, and where such agent transports for others 

for aompensation or hire both operations would be subject to the gross 

rsoeipts tax fixed w th 2 s article of the statutes. 

In othof words, en agent as designated in your letter, in the 

language of the foregoing definition of scontraot oarrier" or "motor carrier," is a "person, firm, or corporation"; suoh agent "owns, oontrols, 

manages, operates or OWSM to be operated a *motor propelled vehiole used 

in tramporting property for compensation or biro between twc.er more 

~inoorporated cities, towns, or villages," as distinguished from exclusive 

operation within oit+os or towns. We think such operation falls squarely 

vithin the purview of the statutory definition, whether treated as a 

smotor oarriers or sobntraot carrier,! and henoe, as above stated, is sub 

jeot to thetas imposed by Artiole 7066b, supra. 

We think it fair to say, h-er, that the question presented 

by you is one of first impression, and it has notboen definitely passed 

upon ly the courts of our State? but whatever doubt exists we feel compelled 

to resolve itin favor of the tax. 

v&y truly yours 

APP3Ovi3D SEP 22, 1944 

/d Grover Sellers 

ATTORITEY GEiVERAL OF TEXAS 

ATTOBBEII GElWHAL OF TEXAS 

Py /s/L, P. Lollar 

L. P; LolIar 

Assistant 

Approved 

opinion Comaittee