. . ” 

’ 

THEATRY-ORNEY GENEKAL 

OF TEXAS 

WILL WIJBON 

A’ITORNEY GENEHAL 

October 7, 1957 

Hon. Robert S. Calvert 

Comptroller of Public Accounts 

Capitol Station 

Austin 11, Texas 

Dear Mr. Calvert: 

Opdnion.No. WW-270 

& ; 

: ~, ;~ 

Whe.the,r or not the W: ,T. 

Grant Company, Dallas, 

Texas; is subject to 

taxation under the leasehold agreement referred 

to in Article 7173, R.C.S. 

You request the opinion of this office upon.the ad 

valorem taxablllty.of the lease-hold estate of W.,T. Grant 

Company In certain real estate located An Dallas, Texas, in:: 

which the University of Texas Is the lessor and W. T. Grant 

Company is the lessee. 

You submitted with your request a copy of the lease 

involved. It is dated December 12, 19?6,,and expires June 30, 

1959. The real property,covered by the lease is concededly 

State-owned property and since it is for a term of more than 

three years its taxabllity is governed,by Article 7173, Vernon's 

Civil Statutes, which provides in,part~,.as followg: 

"Property held under a lease for a 

term of three years or more, orheld 

under a contract for the purchase thereof, belonging to :this State, or that is 

exempt by law from taxation in the hands 

of the owner thereof, shall be considered 

for all the purposes of taxation, as the 

property of the pers,on so holding the same, 

except as otherwise specifically provided 

by law." 

This Statute was construed by the Supreme Court of 

this State In the case of Tramwell v. Faught, Tax Collector, 

74 Tex. 557, 12 S.W.317, as applicable to the lease-hold estate 

and not to ownership of the fee In the following language. which 

we quote from the opinion: 

. II .If appellant had held the 

lands kder an absolute lease for a 

term of three years or more, his leasehold estate would have beensubject to '~ ~';, '~ ,~ 
- 

-- ’ 

Hon. Robert S. Calvert, Page 2 (W-270) 

taxation upon such value as it would 

bring at a fair voluntary sale for cash, 

but he would not have been liable to 

taxes upon the value of the freehold 

estate in the lands." 

Our research does not reveal that this ruling of the 

Supreme Court has been departed'from. Article 717&j V.C.S. 

provides how such lease-hold estate shall be valued. This 

Statute provides lfi'part as follows: 

"Taxable leasehold estates shall 

be valued at such a price as they would 

bring at a fair voluntary sale for cash." 

You are, therefore, respectfully advised that the 

lease-hold estate of W. T. Grant Company In the real property 

In question is subject to ad valorem taxes,and,the value 

should be ascertained as provided In Article 7174, V.C.S; 

,.) 

SUMMARY ,:,I, 

A lease-hold estate of the ~lesseein 

: ., 

property owned by the Statewhich is 

for a term of three or more years is 

subject to ad valorem taxation;- The 

value Should be ascertalned,as.provided 

In Article 7174, V.C.S. 

Very truly yours, 

WILL WILSON 

Attorney General 

LPL:gs 

APPROVED: 

By " (i,\ 

!" 4,&e b/J 

OPINION COMMITTEE L. P. Lolla 

Geo. P. Blackburn,Chairman A,sslstant 

Joe Rollins 

J. Milton Richardson " 

B. H. Timmins, Jr. 

Houghton Brownlee, .J??. 

REVIEWED FOR THE ATTORNEY GENERAL 

By: 

James N. Ludlum