OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN

HonorableGee. Ii.

Sheppard 

### comptroller

of wbliu Aoeountr 

### Austin,Torae

Dear S1rr 0plnlonno. O-la Re: ReduotioAOS



### are In rmml is

0 stat0 

### or Ledtlon with the d La Texas. 806lrb8 your the taxpayer la
r&r **sd** would be a'e**the** YenQr'o lion Bate rt themof ior taxes in T-s.*EOnorablOGo. B.

hrtiole as 

### r0110r0: 7147, Revised Civil Statutes,1925, reads

ii registered in this State, whether at hams or abroad,and all oapite3. lnvestod theraln;allmonem at interest.elthar dthin or without the State, due the person, to be taxed over ,and above what h pays interest fbr. and all other debts' due such person over and aboro hls lXldebtedneos;all pubiic stook and eecurlr tfee; all stock in turn-pikes, railmada, osnals and other corporations(exoept natlOndl banka) out Or ths State, owned by **inhabitants** or thla Stats; all personal lState Of moneyetd corporations, whothor the mars thenof re8ide In or out of this 8tate, snd the Imom 

### or any anup ity, unless the 

### oapitfikor such annnl$y be taxed within thir State; all aharea 1x1 any bank orgsnlaedor that may **be** orgarbed under the laws or theunlted St&em; all lmprovavnta made by persons upon lsnde held **by** them, the title to which Is still tasted In the State Of Texas, or ln any railroad company,or which have been exempted imar taxation ror the benerit or IMT railroad 'aoapaay, or any other oorporation tihose .pro$arty is not nubfeat to the same tie and rule 

### or taxation as other property.*
It lo provided in Artiols 7149, Rerls.6 Civil Statutes, 1925, that:

"'Ceddlt

s. ' - me term 'credits,' wherever useUd:in

this title, 

### shall **be** held to mean and lncllodo every olaim and demand ror mney or other **valuatble** **th*,** **and etev**  **.dutmity or**  **Mimi of**  mroriey~ receivableat stated period&

### 1.27

Honorable Gee. B. Sheppard*Page S

due or to become due,.andall olaime and dsmenda scouredby deed or mortgage, due or to beoome dueru The taxable sltua or the $lS,OOO.OO vendor*8 lien note, in the kbsenceof addiflonalrac*i, 

### Is the domicile or the owner,whether seaured.or unseoured. Ferrisvs. Xemble (S. Ct. l&39) l& S.W. 689 Connors vs. City or Waxehaohle (8. ct. laS9) 19,

S.W. SO Great Southern

### Lirs Znsura~aco. VB. alty or Austin (s. ct. 1922) 243 S.W. 770 Article 7147 lnaludeswithin the deflnltlonof p~r6ondLproperty *allmoneys, oredits,bonds and other ovidmoe of debt owned by cltizsns of this State, whether the 661~ be in or’out or the State.* Artiole 7149 definlng ?zedlts* gives to such term a broad meaning so as to include orerg claim and demand iormoney whether sbcumd or unsecured. No dlstlnat'ion 15 made between aredlts whether satnired

by reel or personal@ropertp or whether the property seeurlng same 1s looatsd~wlthin this Stats or without It,6

jurisdlotlon. ,A,

claim or demand 

### iormoney, unless otherw$ssprovidedby statute,woul~~e~sarly be a *debt due suah person* as set out in ArtfdI.e'?147,althou@ evldenaedby a promieeorynote. As we aonstrue Artiole 7147,'lta srreot is to tax‘ths "net oredlts* owned by a person by allowinga deductionof the debts **wed** by him from the debts due auoh per60nr The result of thls la to arrlve at the taxablevalue or one ltea 

### 0r personalproperty, i.e., "oredits.* Thla oonstruation 1s supportedby ZIU observation

made by ;Tustloe

Gaines in Griffin vs. Heard (S. Ct. 1890).14 S.W. 892, a8 follows:

"The effect of these provisions 1s simply to eubjeot to taxation,‘in addition to tangibleproperty,all moneys aotuallybelonging tothetaxpayer, end any sxaees t&at may exist 

### 0r his 

### areaits over hie lndsbtedness.' The tax in the instant aese la levied against mn item 

### 0r intangible personalproperty

### or whlah the taxpayer 18 the owner whether eecuredor uneeaured,end not egelnst the undarlylngtangibleprop&Q by which lt may be meeured. Whatever the situ5 or the aeourltg,we think i't ls nonethe-HonorableGee. H. Sheppard,Page 4

less an indebtedness of the taxpayer and may be dsduotad **in** arriving at his **taxable oredits.** 

Nor do we think the faot that there is no oonneotlon between the $lS,OOO.OOand 87,GOO.OO items,and that they do not arias out of the same transaoti~npretant a deduction. The apparentpurpose**oi** the **statute is**  **to arrlre**  at the balanos of the total debts due suoh person over and above @Is total indebtedness.

It Is our opinion.under the iaOt8 stated, that the taxpayerwould **be** reqdred to reader as his **taxable** oredlte the value of the $15,000.00 note less the $7.000.00 Item 

### or indebtedness.

Your5 very truly
**ATTOHNXY**GEMERAL O? TEXfiS

ATTORNEYGENERALOF TEXAS

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