. , 

Hon. D. D. Williams 

County Attorney 

Throckmorton County 

Throckmorton, Texas 

Opinion No. V-166 

Re: (1) Can penalty and interest 

be collected on the taxes 

on land which has not 

been assessed or rendered 

for taxation when placed 

on the tax rolls in 

accordance with Article 

7207 of V.C.S. of Texas 

(2) Taxability of corporate 

stock in the hands of 

residents of th;.s State. 

Dear Mr. Williams: 

You submit for the opinion of this Department two ques-- 

tions stated in your letter, which we answer in the order stated. 

Your letter follows: 

"1 . Can penalty and interest be collected 

on the taxes on land which has not been assessed 

or rendered for taxation when placed on the tax 

rolls in accordance with Article 7207 of the 

R.C.S. of Texas, 1925? 

"PARTICULAR FACT SITUATION: There are 

several tracts of land located in Throckmorton 

County, Texas, which have been carried on the 

rolls for many years. If, for example, the 

assessor assesses a tract of such land for the 

year 1940, should penalty and Interest be collected 

on the taxes as though the tract of land had been 

placed on the rolls in the year 1940 and carried 

as being delinquent since that time? 

"2 . Should the stock in the West Texas 

Utilities Co. and other corporations owned by the 

citizens of this county be rendered and assessed 

for taxation in this 

and School purposes?" 

county for State and.Countg 
. 

Hon. D. D. Williams, Page 2, V-166 

Before answering specifically your first question we 

should determine to what extent, if any, Articles 7207, 7346 and 

7347 are modified by S.B. 407, Ch. 128, Acts of the 44th Lcglslature, page 355, and codified as Article 7336f, V.C.S. In 

answering your questions we must consider not only Article 7207 

but also Articles 7346, 7347 and 7348 as we shall explain later. 

Article 7336f reads in part as follows: 

"Section 1. The collection of all delinquent, 

ad valorem taxes due the State, County, Municipality 

or other defined Subdivision that were delinquent 

prior to December jlst, 1919, is forever barred." 

We thlnk the Legislature in the enactment of said S. B. 

No. 407 (Article 7336f, V.C.S.) meant to accomplish more than 

merely the passage of a limitation statute against the collection 

of delinquent taxes, but declared the public policy of the State 

to be that no taxes were to be assessed and collected by the 

State, county, municipality, or other defined subdivisions of the 

State, if such taxes were delinquent prior to December 31, 1919. 

This Is manifest by a careful reading of the entire act, including 

the caption and emergency clause, for the caption merely says, 

"An Act limiting the time within which ad valorem taxes may be 

collected by the State, any county, Irslnlclpallty, or other defined 

subdivision of the State"; in the emergency clause we find, "the 

fact that the people have already passed a constitutional amendment 

giving the Legislature the right to remit taxes that were 

delinquent for a period of ten years or more; and the fact that to 

remit taxes prior to December 31, 1919, would clarify the record 

and remove a cloud from the title of property in this State creates 

an emergency", etc. 

In other words, we think the manifest intention of the 

Legislature in the passage of thfs act, and we so hold, was to 

"wipe the slate clean" of all back taxes, whether upon the assessment rolls or not, that were delinquent prior to December 31, 

1919. To the extent that this opinion conflicts with the prior 

opinions of this department, numbered O-2083 and O-7278, they are 

expressly overruled. With this collateral matter out of the way, 

we proceed to answer your first question. 

We quote below the parts of Articles 7207, 7346, 7347 and 

7348, necessary to be considered in answering your question. These 

Articles provide: 

"Article 7207, V. C. S. 

"If the assessor of taxes shall discover In 

his county any real property which has not been 

assessed or rendered for taxation for any year 
. 

Hon. D. D. Williams, Page 3, V-166 

since 1870, he shall list and assess the same for 

each year for which it has not been assessed, In 

the manner prescribed in the preceding article; 

and such assessment shall be as valid and binding 

ai though,,it had been rendered by the owner thereof; 

. . . . . 

'Article 7346, V.C.S. 

"Whenever any commissioners court shall 

discover through notice from the tax collector or 

otherwise that any real property has been omitted 

from the tax rolls for any year or years since 

1884, . . . . they may, at any meeting of the 

court, order a list of such properties to be made 

In triplicate and fix a compensation therefor; the 

said list to show a complete description of such 

properties and for what years such properties were 

omltted from the tax rolls, . . ." 

"Article 7347, V.C.S. 

"When said list has been so made up the commissioners court may, at any meeting, order a 

cancellation of such properties in said list that 

are shown to have been previously assessed, but 

which assessments are found to be Invalid and have 

not been canceled by any former order ofthe commissioners court, or by decree of any district court; 

and shall then refer such list of properties to be 

assessed or re-assessed to the tax assessor who shall 

proceed at once to make an assessment of all said 

properties, from the data given by said list ( the 

certificate of the Comptroller as to assessments or 

re-assessments made by the tax assessor shall not be 

necessary as required under Article 7207, but ,he 

shall furnish all blank forms needed, that uniformity 

may be had In all counties), and when completed 

shall submit the same to the commissioners court, 

who shall pass upon the valuations flxed by him; and, 

when approved as to the values, shall cause the taxes 

to be computed and extended at the tax rate in effect 

for each separate year mentioned in said list; and, 

In addition thereto, shall cause to be added a 

penalty equal In amount to what would be six per cent 

interest to the date of making said list from the 

date such properties would have been delinquent had 

same been properly rendered by the owner thereof 

at the time and for the years stated in said list; 

II . . . . . 
. . 

Hon. D. D. Williams, Page 4, v-166 

"Article 7348, V.C.S. 

"The said list, when complete ln all respects, 

and filed with the tax collector, shall constitute 

a valid lien against all the properties mentioned 

in said list for the full amount of taxes, penalties, 

officers costs, advertising and six per cent interest 

from the date of said list to the date of the payment of the full sum due on each separate piece of 

property. A copy of said list and all cancellation 

orders shall be furnished to the Comptroller, and a 

copy filed with the county clerk.' 

We shall consider these articles in the order stated 

above. Article 7207 was enacted in 1888, (Acts 1888, page 4; 

G.L. Vol. 9, p. 1002) and at this time and several years thereafter penaltles and interest upon delinquent taxes were not 

imposed. It Is observed that no provision is made in said article 

for penalties and Interest upon the taxes assessed by virtue 

thereof. It does nothing more than to impose a duty upon the 

assessor, if he discovers in his county any real property which 

has not been assessed or rendered for taxation for any year since 

1870, to "list and assess the same for each year for which It 

has not been assessed". As modified by what we have said above 

said article should now in effect read since 1918 instead of 1870. 

In 1905 the Legislature enacted Articles 7346, 7347 and 

7348 (Acts 1905, page 318) at which time penalties and interest 

had theretofore been imposed by the Legislature upon delinquent 

taxes for several years. Article 7346, provides substantially as 

does Article 7207 for the assessment of property omitted from the 

tax rolls for any year or years since 1884, (should now be since 

1918) but goes further and provides a comprehensive method of 

assessing and collecting such taxes upon such omitted property. 

Article 7347 and 7348, a part of the same act, speclfles the 

penalty or interest that should be collected upon such taxes. 

This is the first time the Legislature in deflnite terms gives 

the penalty and interest applicable to taxes assessed and collected 

upon property theretofore omitted from the tax rolls. We are 

governed by these statutes as to the penalty and interest that 

should be collected, regardless of whether the assessment of such 

omitted property arises under Article 7207 or 7346. These two 

articles are in & materla and should be construed together. 

The Legislature did not expressly, or by implication, repeal 

Artlclo 7207 in the enactment of Articles 7346 and 7347. Indeed, a 

reading of Article 7347 dlsclosos that the Legislature intended 

for Article 7207 to continue In effect for the purposes for which 

it was originally enacted and to continue In effect the duties 

imposed upon the Tax Assessor to put omitted property upon the tax 

rolls and assess it when he discovers It has been omitted. We look 
Hon. D. D. Williams, Page 5, V-166 

to Artfcles 7346, 7347 and 7348, the later act, to find the penalty and interest that should be Imposed in such Instance. 

In our opinion it is not material from what source comes 

the information that property has been omitted from the tax rolls 

and has been escaping taxation; the important thing is that It 

get on the rolls, be assessed, 

of the tax burden. 

and begin to bear Its just portion 

Whether the omission Is discovered by the Tax 

Assessor as provided In Article 7207, or the tax collector as provided in 7346, ,the duty remains the same, to proceed in the 

statutory manner to subject such omitted property to taxation. It 

1s observed that Article 7346 provides that the Commissioners1 Court 

shall "Order a llat of such property to be made ln triplicate and 

fix a compensation therefor; the said llrt to show a complete list 

of such property and for what year such property was omitted from 

the tax rolls". Article 7347 provides 'When the said list has 

been so made up the Commissionera' Court may, at any meeting, . . . 

and shall then refer such list of property to be asaessed or 

reassessed to the Tax Assessor who shall proceed at once to make an 

assessment of all said propertyand when completed shall submit the 

same to the Commissioners1 Court who shall pass upon the valuation 

fixed by him; and when approved as to the value shall cause the 

taxes to be computed and extended at the rate In effect each separate year mentioned in said llat .” Article 7348 provides that 

said list, when completed In all respects and filed with the tax 

collector, shall constitute a valid lien against all of the 

property mentioned In said list for the full amount of the taxes, 

penalties, officers costs, and advertising. 

Article 7347 and 7348 state specifically and separately 

the penalty and interest to be imposed upon taxes that are found 

owing upon such omitted property. After the taxes have been 

computed for theNrespectIve years aa shown upon the list there is 

added thereto a penalty equal in the amount to what would be six 

per cent interest at the date of making said list from the date 

such prooerties would have been dellnauent had same been properlr 

rendered by the owner thereof at the time and for the years stated 

in said list." (gmphasls added) Said Article 7348 provides 6% 

interest from the date of said list to the date of payment for the 

full amount due on each separate piece of property. It is observed 

that the 6% is called a penalty when first calculated from the date 

such properties would have been delinquent to the date of making 

said list and in Article 7348 It calls the 6% interest. It makes 

no difference whether we call this 6% a penalty or interest, It 

is the same, and in effect is calculated from the date the property 

would have become delinquent had It been rendered by the owner to 

the date of payment. This calculation in either event Is on an 

annual basis. We have no doubt that Articles 7347 and 7348 are the 

governing statutes in determining the penalty and interest that 

should be collected by the Tax Collector upon taxes assessed upon 
Hon. D. D. Williams, Page 6, V-166 

omitted property. We think the case of Electra Independent School 

District vs. W.T. Waggoner Estate, Supreme Court of Texas, 168 S.W. 

(2d) 645, confirms our view, and from this case we quote: 

II . . . The legislature has provided a procedure 

for the reassessment of property for taxation where 

property has been for any reason omitted from the 

tax rolls, or where assessments have beenfound to 

be invalid. Chapter 11, Title 122 of the Revised 

Civil Statutes of Texas, Article 7346 et seq. . . ." 

It would serve no useful purpose for us to enter upon an 

academic discussion of why the penalties and interest imposed 

Articles 7347 and 7348 might In sane Instances impose a lesser 

by 

burden upon the taxpayer where his property had been omitted from 

the rolls and assessed by vlrtue of Article 7207 or 7346 than 

would be imposed upon a delinquent taxpayer who might have regularly 

rendered his property for taxation but had refused or neglected to 

pay his taxes within the time prescribed by statute, whereby his 

taxes had become delinquent, as this is a matter vested solely In 

the Legislature. Conceivably the Legislature may have thought that 

the omission of property from the tax rolls may have resulted from 

negligence upon the part of the taxing officials as well as neglect 

upon the part of the property owner, and imposed penalties and 

interest it thought commensurate to meet the problem dealt with. 

All that we have said above, applicable to State and 

County taxes, applies with 'equal force to common school districts' 

taxes which, by virtue of Article 2795, V.C.S., are required to 

be llsted, assessed, and collected by the County officials. A ten 

year statute of limitations applies to school taxes. 

You are, therefore, advised that it is our opinion that 

taxes assessed upon omitted property, such as comprehended under 

Articles 7207 and 7346, bear 6s penalty or interest, calculated 

upon an annual basis, from the date such property would have become 

delinquent if rendered by the owner, to the date of payment, together with such officer's cost and cost of advertising, if such costs 

have been Incurred. 

We pass to your second question, which for convenience we 

restate as follows: 

"2 . Should the stock in the West Texas 

Utilities Co. and other corporations owned by the 

Citizens of this county be rendered and assessed 

for taxation in this county for State and County and 

School purposes?" 

In answering this question, we should note certain 
Hon. D. D. Willlams, Pa8e 7, v-166 

statutory provlslons, which, for clarity, we state as follows: 

“Article 7147, V. C. S. 

“Personal property, for the purposes of 

taxation, shall be construed to include . . . . . 

all stock in . . . other corporations (except 

national banks) out of the State, owned bx lnhabitants of this State; . . . .” 

“Article 7161, V. C. S. 

“Each person required by law to list property shall make and sign a statement, verified 

by his oath, as required by law, of all property, 

both real and personal, in his possesslon, or 

under his control and which he Is required to 

list for taxation, either as owner or holder thereof, or as guardian, parent, husband, trustee, 

executor, administrator, receiver, ,,aocounting 

officer, partner, agent or faotor. 

“Article 7162, v. C. S. 

11 Such statement shall truly and dlstlnctli iei forth: . . . . . 

stock”3a’ 

Amount and value of shares of capital 

companies and associations not incorporated 

by th& laws of this State. 

“39. Value of property of companies and corporations other than property hereinbefore enumerated.” 

“Article 7163, V. C. S. 

“No person shall be required to list or render 

or to include In his statement as a part of his 

personal property, which is required to be listed any 

share or portion of the capital stock or property Of 

any company or corporation which is required to iist 

or return its capital and property for taxation. 

We answer this question with a statement from 11 Texas 

Jurisprudence, page 219. 

“Under the Texas scheme of taxation, .the property 

of a corporation is taxed only to the corporation; the 

stockholders are not separately assessed upon their 

stock. Indeed, there la express provision that, in 
Hon. D. D. Williams, Page 8, V-166 . 

rendering a return of hla personal property for 

taxation, no person is required to include In his 

statement any share or portion of the capital stock 

or property of an@ corporation which Is required to 

return its capital and property for taxation; and 

under this article stoek 1s not taxable to the stockholder even where the oompany has not returned its 

property for taxation in accordance with law. 

Under the statute law of Texas stock in 

foreigi dorporations owned by inhabitants Af Texas 

Is expressly included in the deflnltlon of 'personal 

property,' The validity of such taxes has been upheld as against constitutional objeotlons," 

Conceivably the provisions of Article 7163 may rest upon 

the well-recognized principle of law that a stockholder Is not the 

owner of the property owned by a oorporatlon in which he owns 

shares of stock. Instead, a stoakholder merely possesses, in 

common with all other stockholders, an interest evidenced by shares 

of stock which authorlzea him, through selected officers and 

directors, to participate in corporate management, an8 receive 

dividends when declared, and to demand his pro rata share of corporate assets upon dissolution of the corporation. 

Stock of State and National banks are partially excepted 

from the provisions of Article 7163, for by special provisions, 

banks pay upon the real estate owned by them, but not upon their 

personal property. This, in effect, results Ln taxes against the 

stockholders upon the stock owned by them, the value of which i.s 

reduced by the factor of the real estate which the banks themselves 

render and pay upon. 

We hold that stook in domestic corporations, owned by 

residents of this State, is not subject to advalorem taxes, but 

stock in foreign corporations, owned by residents of this State, is 

subject to ad valorem taxes, 

We believe we have answered your question without the 

necessity of stating categorically whether or not the capital stock 

of any particular corporation would be subject to ad valorem taxes 

as personal property in the hands of the owner. 

asses:& 

Property omitted irom the tax poll and 

by the virtue of Artioles 7207 and 7346 

V.C.S., for all years since 1918 is subject to 64 

penalty or interest, caloulatad annually, from the 

date such property would have beoome delinquent if 
Hon. D. D. Williams, Page 9, v-166 

rendered by the owner to the date of payment. 

Electra Independent School District (Supreme Court) 

168 S.W. (2) 645. 

2. Stock of domestic corporations owned by 

residents of this State is not subjects to ad 

valorem taxes in the hands of the owner, but stock 

of foreign corporations owned by residen;s of this 

State Is subject to ad valorem taxes In the hands 

of the owner. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By SL L. P. Lollar 

L. P. Lollar 

Assistant 

APPFiOVIP> APR. 28, 1947 

s/ Price Daniel 

ATTORNEY GENERAL 

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