Hon. Geo. H. Sheppard

Comptroller of Public accounts State of Texas Austin, Texas

Dear Sir: OpinionNo. o-230~A Re: Reconsiderationof opinionNo. O-2304. An individualwho owns tank cars inwhich he transportshis own gasoline andwho does not lease, rent or chargemileage for said cars is not required to make the reports or pay the occupation tax under Art. 7062. This is in answer- to your request for a reconsideration by us of our opinion No. O-2304 concerningthe payment of the occupation tax by private owners of tank carswho receive mileage payments from railroads for the use of such cars0

Me have carefully studiedyour request for a reeonsiderationof our opinionNo. O-2304 in the light of the authorities quotedby you in your said request.

Article 7062 of theRevised Civil Statutes of Texas reads as follows:

“Lath individual, company, corporationor association, residingwithout this State, or incorporatedunder the laws of any other state or territory, or nation, and owning stock cars, refrigeratorand fruit cars of any kind, t,ankcars of anv kind coal cars of any kind, furniture cars or commonbox car: and flat cars, and leasin=, renting or charm mileape for the use of such carswithin the State of Texag, shallmake quarterly, on the first days of January, April, July and October of each year, and report to the Comptrollerunder oath of the individual or of the president, treasurer or superintendentof such company, corporationor association, showing the amount of gross receipts from such rentals, ormileage, or from such other sources of revenue received from,businessdonewithin this State, during the quarternext preceding. Said individuals, companiesand corporations,and associations,at the time of making said report, shallpay to the Treasurer of this State an occupation tax for the quarterbeginning on said date equal to threeper cent of said gross receiptsas shown by said report.” (Underscoringours)Hon. Georgei'H&She.&&d, page 2

It is our opinion that private owners of tank cars who ship their own commodities in said tank cars and receive mileage payments from railroads for the use of the cars are not "chargingmileage" and therefore are not subdectto~the tax described under Article 7062.

In discussingthis article of our law in our opinion No. O-2304,we stated as follows:

"In a second letter on this questionyou gave us additional facts as followst "'The owner of a tank car loads said car at Sweetwater,Texas,with gasoline and makes out a bill of lading on same for delivery to himself at Fort Worth, Texas, the Texas and PacificRailway Company moving said car as per bill of lading. The Texas and Pacific Railway Company then presents freightbill at the destinationunder the rates and terms of regularly published tariffs of the InterstateCommerceCommission. "'lit regular intervals, the Texas and Pacific Railway Company, under regularlypublished tariffs of the InterstateCommerce Commission,pays to the owner of said tank car the equivalentof l&? a mile for eachmile which said car traveled loaded on lines of said railway.'
"Aswe interpret the facts, these tank cars are used to transport only the owner's property. The owner loads the car at Sweetwater and the railroad company moves the loaded car to Fort Worth,where the owner pays the freight on the load at the same rate as if the property had been transported in the railway company's own car. At regular intervalsthe railway companypays the owner of these cars l&? a mile for each mile it was used, that is, traveled,while loaded. II

. . . "Itwill be noticed that the part of the statute with which we are concerned says that 'eachindividual

. . + owning

. . . tank cars of any kind

. . . and leasing, renting or chargingmileage for the use of such carswithin the State of Texas' shall make the required reports and pay theprescribed occupation tax. Under the facts that you have given us the individual owns tank cars. But, is he engaged in 'leasing,renting or charging mileage for the use of such cars'? We think the answer is 'No'.Hon. Geo.H. Sheppard,page 3

"It is true that the owner of the cars is paid a sum of money by the railway company that transports the cars at a rate of somuch per mile while loaded; but, we do not believe this is an arrangementby which it can be consideredthat the owner is leasing or renting the cars to the railway company. Nor do we consider that the owner is chargingmileage for the use of the cars. What it amounts to is this: The individual in question furnishes his own cars to haul his own property, and of coursehe is entitled to pay a less transportation charge to the railway thanhe would be if the railway furnished the cars; and instead of paying a smaller freight rate, the individual in this casepays the same rate that he would pay if the railway furnished the cars and the railway in turn hands him back l&z+ per mile. "If the railwaywas allowed to haul other people's merchandise in this car-owner'scars, and said car-owner was paid l&? per mile by the railway for so using the cars thatwould constitute 'leasing,renting or chargingmileage for the use of such cars';but, we understand that these cars are used only to haul the car-owner'sproperty. "This statutewas apparently intended to apply to car ownerswho leased and rented their cars to others or turned their cars over to other persons and charged mileage therefor! for such other persons to haul their (said otherperson s)merchandise or haul merchandise for hire as a common carrier. We donot believe itwas intendedby the legislature that this statute apply to cars used exclusively for hauling the car owner's own property."
It is our judgmentthat our opinionNo. O-2304 correctly stated the law applicable to the fact situation statedby you, andwe therefore readopt and affirm said opinion.
~APPROVED

JUN 3, 1943 /s/ Grover Sellers FIRST ASSISTANTATTORNEY GENERAL GPB:HMMzwb Yours very truly ATTORNEYGENERAL OF TEXAS By /s/ Geo. Pi Blackburn Geo. P. Blackburn,

,Kssistant