THE A~BXORNEY GENERAL 

TEXAS 

GROVER SELLERS Arwrrniu 11. -rexAn 

A'ITORNWCY DsN*:RAx. 

Honorable George B. Butler, Chairman 

Board of Insurance Commissioners 

Austin, Texas 

Dear Sir: Opinion No. 0-6536 

Re: Whether ta'x levied by Art. 7064a, 

V.A.C~.S. pard by statewide mutual 

assessment association3 operating 

under Art, 5068-l may be paid from 

their Mortuary Fund, and related 

questions. 

Your letter of April 16, 1945, requesting an opfnion of 

this department presents the following questions: 

"1 . 

"2 . 

ante 

May any part of the occupation tax levied 

by Article 7064a paid by statewide mutual 

assessment associations operating under 

Article 5068a-1 be pald from their Mortuary Fund? 

May any part of the Federal Income Tax 

assessed agatnst and collected from assessment assoctations operating under Article 

5068-l be paid from the Mortuary Fund of 

such associations in the event that 

(a) the premium income is from life insurpollcles exclusively, or 

(b) the premium income is from health and 

accident insurance policies exclusively, or 

(cl a part of the premium income is from 

life insurance policies and apart from health and 

accident policies, or 

(d) where the premuim income IS from health 

and accident policies which include life benefits 

or from life insurance policies which include health 

and accZdent benefits?" 

In your letter, opinions from this department - o-2988, 

O-5337, and O-5539 - are referred to in connection with the 
* . 

. 

Honorable George B. Butler, page 2 O-6536 

foregoing questions. In Opinion NO, o-2988 approved January 

30, 1941, this department held that no part of the premium tax 

imposed by Art. 7064a, Vernon's Annotated Civil Statutes, may 

be paid from the mortuary or relief funds as provided for under 

Section 12, Art. 5068-i of said statute, 

Opinion No, O-5337 holds that mortuary OP relief funds 

of mutual assessment associations subject to the 

S.B. 135, 46th Legislature (Art, 5068-1, V.A.C.S. F 

rovisionsof 

accumulated 

or contributions that may be made thereto, should Aot be treat84 

as taxable income under the Federal Revenue Act of 1936. This 

ruling is based upon and follows ,the decision cited by you In 

General Life Insurance Company vs. Commissioner of Internal 

Revenue (5th Cir. Ct, of Appeals, 137 Fed. (2d) 185, decided 

July 8, 1943) o In Opinion No, O-5589 we follow the ruling in 

Opinion No. O-2988 snd hold tha,t the gross premium tax levied 

under Art, 7064a cannot be paid out of the mortuary or relief 

funds described in Sec. 12, Art, 5068-1, V.A.C.S. Said 

opinions are applicable to statewide mutual assessment assoclations operating under and subject to the provisions of Art. 

5068-l. 

Answering your first question, therefore, you are respectfully advised that no part of the receipts tax levied under 

Art. 7064a may be paid by statewide mutual assessment associations operating under and subject to the provisions of Art. 

5068-1, V.A.C.S,, from their mortuary funds. 

As to your second question, you doubtless have in mind 

the provisions of Art, 5068-4, V.A,C.S, enacted by the 48th~ 

Legislature, effective May 1.8, 1943. This statute was referred 

to in Opinion No, O-5337 and should not be given any greater 

import than the intent of the Legislature can be gathered from 

its language. This statute provides: 

'Any company or association operating 

under the provisions of Senate Bill No. 135, 

Acts of the Regular Session of the 46th Legislature, Chapter 6, page 401, may pay from 

the mortuary or relief funds by whatever name 

It may be called any taxes that may be assessed 

against or required to be paid by the company 

or association because of income to such funds." 

As recognized in the last above cited opinion, the foregoing statute would permit payment from the mortuary or relief 

funds of any legally assessed income tax against OP required 

to be'paid by the company because of such funds being held taxable as income under the Federal Revenue Act. 
Honorabie George B, Butler, page 3 O-6536 

Answering your second question, i.t is our opinlon ttiat 

only those taxes legally assessed under the Federal Internal 

RevenGe Act against the mortuary or relief funds, collected 

from or required to be paid by assessment associations subject 

to and operating under the provisions of Art. 5068-1, V,A.C.S., 

may be paid from such fund. Any portion of the funds of one 

g'ro;*p, club or class;, bowever, may not 'be used to paji such 

claims or obligations of any other group, club or class as provided In Set, 12 of said statute, 

Yours very truly, 

ATTORNEY GENERAL OF TEXAS 

By s/Wm. J. R. King 

Wm. J, R. King 

Assistant 

WmK:LJzwc 

APPROVED MAY 3, 1945 

s/Carlos C. Ashley 

FIRST ASSISTANT 

ATTORNEY GENERAL 

Approved Opinion Committee By s/BWB Chairman