OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Honorable Gee. Ii. Sheppard 

comptroller of wbliu Aoeountr 

Austin, Torae 

Dear S1rr 0plnlon no. O-la 

Re: ReduotioA OS 

are In rmml 

is 

0 stat0 or Ledtlon with the 

d La Texas. 

806lrb8 your 

the taxpayer la 

r&r 

sd would be a'ethe YenQr'o lion Bate 

rt themof ior taxes in T-s.* 
EOnorablO Go. 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 l Xldebtedneos; 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 

l State 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 orgsnlaed or 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~ receivable at stated period& 
1.27 

Honorable Gee. B. Sheppard* Page S 

due or to become due,.and all olaime and 

dsmenda scoured by deed or mortgage, due 

or to beoome dueru 

The taxable sltua or the $lS,OOO.OO vendor*8 

lien note, in the kbsence of addiflonal rac*i, Is the 

domicile or the owner, whether seaured.or unseoured. 

Ferris vs. 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~a co. VB. 

alty or Austin (s. ct. 1922) 

243 S.W. 770 

Article 7147 lnaludes within the deflnltlon of 

p~r6ondL property *all moneys, 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 ior money, 

unless otherw$ss provided by statute, woul~~e~sarly be a 

*debt due suah person* as set out in ArtfdI.e'?147, althou@ evldenaed by a promieeory note. As we aonstrue 

Artiole 7147,'lta srreot is to tax‘ths "net oredlts* 

owned by a person by allowing a deduction of the debts 

wed by him from the debts due auoh per60nr The result 

of thls la to arrlve at the taxable value or one ltea 

0r personal property, i.e., "oredits.* Thla oonstruation 

1s supported by 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 tangible property, 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 personal property or whlah the taxpayer 

18 the owner whether eecured or uneeaured, end not egelnst 

the undarlylng tangible prop&Q by which lt may be meeured. 

Whatever the situ5 or the aeourltg, we think i't ls nonethe- 
Honorable Gee. 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.OO and 87,GOO.OO items, and that 

they do not arias out of the same transaoti~n pretant a deduction. The apparent purpose 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 taxpayer would 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 

ATTORNEY GENERAL OF TEXAS 

/