THE Arro NE\- GENERAL 

OF TEXAS 

June 2, 1988 

Honorable Toby C. Wilkinson 

Hunt County Attorney 

P. 0. BOX 1097 

Greenville, Texas 75401 

Opinion No. JM-913 

Re: Constitutionality of 

temporary occupation tax 

on attorneys (RQ-1347) 

Dear Mr. Wilkinson: 

you ask whether a temporary occupation tax imposed on 

attorneys is constitutional. We conclude that it is. 

The 70th Legislature enacted a temporary occupation tax 

on attorneys to be applied from January 1, 1988, until May 

31, 1990. Acts 1987, 70th Leg., 2d C.S., ch. 5, art. IX, 

5 12 at 35: Tax Code, 55 191.141 - 191.145. The tax is 

applicable to persons licensed to practice law in Texas, Tax 

Code, § 191.141, but it does not apply to: 

(1) an attorney who is 70 years of age or 

older: or 

(2) an attorney who has assumed inactive 

status under rules governing the licensing of 

attorneys. 

Tax Code, g 191.144. Additionally, the Tax Code provides 

for the proration of the tax due in certain cases: 

If a person is licensed to practice law 

after the beginning of the tax year [June 1 

of one year through May 31 of the following 

year] or resumes active status to practice 

law after the beginning of the tax year, the 

person being .licensed or resuming active 

status shall pay the tax imposed by this 

subchapter in proportion to the number of 

months for which he will be licensed during 

that tax year. If a person is licensed after 

the beginning of a calendar month, the month 

in which he is licensed shall count as a 

month for purposes of payment of taxes. . . . 

P. 4557 
Honorable Toby C. Wilkinson - 2 (JM-913) 

Tax Code, 5 191.143(b).l 

You ask whether these provisions violate the 

requirement in article VIII, section 2, of the Texas 

Constitution that occupation taxes be "equal and uniform 

upon the same class of subjects within the limits of the 

authority levying the tax. . . .I' 

? 

The courts have long concluded that the constitution 

permits the legislature to levy occupation taxes based on 

classification schemes established by that body, so long as 

the legislation is not discriminatory between 

In other words, 

the same or 

JJ& classes. if there is a rational basis 

for the classification scheme selected by the legislature, 

the constitutional command that occupation taxes be uniform 

will be satisfied. The propriety of classification schemes 

selected is 

primarily within the discretion of the 

Legislature; and . . % courts can interfere 

only when it is made clearly to appear that 

there is no reasonable basis for the attempted classification. If there is a reasonable 

basis or, to express it differently, it 

cannot be said that the Legislature acted 

arbitrarily, the courts will not interfere. 

Hurt v. Coover, 110 S.W.2d 896, 901 (Tex. 1937). See also 

Bullock v. AB' C Interstate Theatres. Inc., 557 S.W.Zd 33 M 

(Tex. Civ. App. - Austin 1977, writ ref'd n.r.e.), cert. 

denied 439 U.S. 894 (1984), and Bank of Texas v. Childs, 615 

S.W.Zd 810, 815 (Tex. Civ. App. - Dallas 1981, writ ref'd 

n.r.e.), reversed sub nom. American Bank and Trust Co. v. 

Dallas County, 463 U.S. 855, reh*a denied, 463 U.S. 1250 

(1983).2 

1. The legislature may provide for the pro rata payment 

of taxes. See aenerallv Attorney General Opinion JM-399 

(1985). 

2. A classification scheme employed by a state in a tax 

law will not offend the equal protection clause of the 

Fourteenth Amendment to, the United States Constitution if it 

is founded on a reasonable distinction or difference in 

state policy. Kahn v. Shevin, 416 U.S. 351, 355 (1974). 

? 

P. 4558 
Honorable Toby C. Wilkinson - 3 (JM-913) 

In 

that: 

Attorney General Opinion C-46 (1963), it was held 

The mere fact that discrimination is made in 

classifications for occupation taxes proves 

nothing against classification which is not 

on its face an arbitrary, unreasonable or 

unreal one. 

The Texas Supreme Court has noted that this rule "has 

been stated so often as to render unnecessary any further 

discussion of it." Texas Co. v. Stenhens, 103 S.W. 481, 482 

(Tex. 1907). See also 54 Tex. Jur. 2d, Taxation, at section 

29. The Texas Supreme Court has written: 

The very language of the Constitution of 

state implies power in the Legislature 

classify the subjects of occupation taxes 

only requires that the tax shall be equal 

. - . - 

the 

to 

and 

and 

unirorm upon tne same class. persons who. in 

the most aeneral sense. mav be reaarded as 

pursuina the same occuoation . . . mav thus 

be divided into classes. and the classes may 

be taxed in different amounts and accordinq 

to different standards. Merchants may be 

divided into wholesalers and retailers, and, 

if there be reasonable grounds, these may be 

further divided according to the particular 

classes of business in which they may engage. 

The considerations upon which such classifications shall be based are primarily 

within the discretion of the Legislature. 

The courts . . . can only interfere when it 

is [clear] that an attempted classification 

has no reasonable basis in the nature of the 

businesses classified, and that the law 

operates unequally upon subjects between 

which there is no real difference to justify 

the separate treatment of them undertaken by 

the Legislature. . . . (Emphasis added.) 

Texas Co. v. Stevhens, 103 S.W. 481, 485 (Tex. 1907). See 

also Dancetown. U.S.A. Inc. v. St e, 439 S.W.2d 333 (Tex. 

1969) and wont Dallas Restaurants, Inc., v. McBeath, 618 

S.W.2d 931 (Tex. Civ. App. - Waco 1981, no writ). 

In Dancetown, SLWZ, a taxpayer complained about a 

classification scheme in an occupation tax levied on certain 

.amusement enterprises. The rate of,tax differed based on 

P the sort of amusement furnished. The taxpayer argued that 

p* 4559 
Honorable Toby C. Wilkinson - 4 (JM-913) 

an "amusementV* is an *'amusement,** and that there was no 

rational basis for varying the rate of tax by classifying, 

for example, the amusement provided by operas differently 

from that obtained from dance halls or animal contests. The 

court, after citing the language in Texas Co. v. Stevhens, 

noted that: 

The members of each class into which the 

amusement business is now divided obviously 

differ from the members of every other class 

in their methods and places of operation and 

in the nature of the entertainment generally 

offered. Each class seems to embrace every 

enterprise that should reasonably be included 

in the same category. Since appellants have 

not demonstrated by proof or otherwise that 

'there is no real difference to justify the 

separate treatment undertaken by the Legislature,' we cannot say on the present record 

that the classification is so arbitrary and 

unreasonable as to render the statutes 

unconstitutional. 

439 S.W.2d 333, 337 (quoting Texas Co. v. SteDhens, 103 

S.W.2d 481, 485). 

You have not suggested any reason why the classifications chosen by the legislature in this statute might be 

unreasonable, and we believe that rational explanations for 

the choices made by the legislature can be presumed. We 

conclude that a court would find that the legislature has 

divided the broad categories of lawyers into reasonably 

drawn classifications which distinguish between persons who 

do not in fact pursue the occupation of an attorney and 

those who do. See. e.a., State v. Pioneer Oil and Refining 

Co., 292 S.W. 869 (Tex. Comm'n App. 1927, judgment adopt'd). 

Thus, a rational basis can be perceived for the 

classification schemes selected by the legislature here. 

First, lawyers who are in an inactive status under the 

statute governing the status of attorneys cannot engage in 

any activities in Texas which will constitute the occuDation 

of being an attorney at law. Gov*t Code, §§ 81.052-81.053. 

Thus, they are not even within the occuvation group to which 

the tax applies, absent any question about classifications 

of that group. Second, it is not irrational to assume that 

lawyers over the age of 70, more often than not, do not 

actively engage in the practice of law, and it is reasonable 

to assume that in the main, attorneys in that classification 

are not in the same occupational circumstances as lawyers 

p. 4560 
Honorable Toby C. Wilkinson - 5 (JM-913) 

whose careers are still in full blossom. Tex co 

;;;Ihens, suura; see also Kahn v. Shevi& 416 U":. 352 :; 

2. C mDare Massachusetts 

427 'U.S. 

Board of Retirement 

Wuraia, 307 (1976) (legislative classificati% 

distinguishing the elderly from the non-elderly population 

for the purpose of conferring benefits and burdens has a 

rational basis and thus is permissible under the equal 

protection clause of the Constitution). Finally, the 

proration provision merely makes a rational temporal 

distinction between taxpayers who practice the occuoation 

subject to the tax for an entire tax year (lawyers on active 

status under the statute governing the practice of law, see 

Government Code §§ 81.052-81.053) and taxpayers who may not 

lawfully practice the occupation at the beginning of the tax 

year, but who become eligible to carry on the occupation 

during the year. 

Thus, the classifications cannot be said to be 

arbitrary, or without relation to the actual division of 

lawyers into those who carry on the occupation of attorney 

in Texas, and those who do not. State v. Humble Pine Line 

co., 247 S.W. 1082 (Tex. 1923). Accordingly, the statute 

under consideration here is constitutional. 

e 

SUMMARY 

A classification scheme specified by the 

legislature, levying a temporary occupation 

tax on attorneys according to section 191 of 

the Tax Code, does not violate the "equal and 

uniform" rule of article VIII, section 2 of 

the Texas Constitution unless the classes 

devised by the legislature clearly appear to 

be arbitrary and 

JIM MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

,C. 

mu MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAXLEY 

Special Assistant Attorney General 

p. 4561 
Honorable Toby C. Wilkinson - 6 (JM-913) 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Don Bustion 

Assistant Attorney General 

p. 4562