E * 

OFTEXAS 

GENERAL 

AUSTIN 1~1. TEXAS 

January 21, 1957 

Honorable Robert 5. Calvert Opinion No. WW-4 

Comptroller of Public Accounts 

Capitol Station Re: Whether or not, under the 

Austin, Texas terms of lease agreements, the 

lessors of trucking equipment are liable for gross reDear Mr; Calvert: 

celpts tax as provided for by 

Article 7066b, V.C.S. 

Your letter requesting our opinion in reference to the 

captioned matter reads in part at follows: 

“Sub-Section A of Section I of Article 7066b, 

V.C.S. reeds as follows: 

iil Each individual, partnership, company, association 

or corporation doing business as a “motor bus company” 

as defined in Chapter 270, Acts, Regular Session of the 

Fortieth Legislature, as amended by the Acts of 1929, 

First Called Session of the Fort 

Chapter 7,8, or as “motor carrier 

x-first Legislature, 

or “contraqt carrier” 

as defined in Chapter 277, Acts, Regular Session of the 

Forty-second Legislature, over and by use of the public 

highways of this State, shell make quarterly on ,the first 

day of January, April, July end October of each year, 

a report to the Comptroller, under oath, of the individual, partnership, company, association, or corporation 

by its president, treasurer, or secretary, showing the 

gross amount received from intrastate business done within this State in the payment of charges for trensporting persons for compensation and any freight or commodity for hire, or ~from other sources of revenue received 

from intrastate business within this State during the 

quarter next preceding. Said individual, partnership, 

company, association, or corporation at the time of making said report, shall pay to the State Treasurer an 

occupation tax for the quarter next preceding said date 

equal to 2.42% of said gross receipts, as shown by said 

report. Provided, however, carrier5 of persons or property who are required to pay an intangible assets tax 

under the laws of this State, are hereby exempted from 

the provisions of this Article of this Act.’ 
. - 

i, 

Hon. Robert S. Celvert, Page 2 (WW%) 

“1 have contacted a number of truck owners for 

the tax end have.been furnished with copies of Lease 

Agreements, copies of which Lease Agreements, covering 

leased commerclel ,vehicles, ere on file with the Department of Public Safety in accordance with Article 67OlC-1, 

R.C.S. 

“lam enclosing e copy of one of the Lease Agreements between OR. F. Moore, L. H. McCeIvey and Joe 

Ferguson of Temple, ,Texes, lessors and Baldwin-Hill 

of Trenton, New Jersey, lessee. 

“Please advise me whether or not, under the 

terms of this Lease Agreement, the lessors are liable 

for the gross rece.ipts tax provided for by Article 

7066b, V.C.S. If the lessors are not required to 

pay the tax, please advise me whether or not the 

lessee or anyone else is required to pay the tax.” 

Under the express provisions of Article 7066b, Vernon’s 

Civil Statutes, a gross receipts tax is only levied against 

those who transport persons or freight for compensation. Anyone 

who transports himself or his own commodities is not subject to 

the tax. In doing h,is own transporting, whether h,e uses a 

vehicle that he owns, borrows, leases, or rents is immaterial. 

We have ca,rafully examined the lease agreement f,urnished 

us* and find that same, :gives the lessee full control over the 

leased tractors end trailers; that the operators of the vehicles 

are to be hired by the lessee and to be under lessee’s control. 

It is our opinion that this lease agreement is valid-and, if the 

parties thereto operate in compliance therewith, no tax will accrue under said Article 7066b. 

Of c-*rrse, if the lease agreement is a subterfuge, 

and the lessor of the ,vehicles operates them himself or through 

his own drivers, then the lessor is liable four the gross receipts 

tax. 

Individuals, partnerships, companies, assoclatlons or corporations may transport their own commodities by use of leased motor vehicles without subJetting themselves or their lessee to the payment of 
Hon. Robert”S. Celvert, page 3 (WV!-4) 

the motor carrier gross receipts tax levied by Article 7066b, V.C.S., whep the lease agreement provides that the lessee shall have full control over 

the vehicles and the lessee is to hire the drivers 

and control them. However, if the lease agreement is 

is a subterfuge and the lessor retains control over 

the vehicles or drivers, the tax will accrue against 

the lessor. 

Approved: 

Opinion Committee *’ 

H. Grady Chandler 

Cha 1 rman I, 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

Ass1 stant