December 28, 1962

Honorable Robert S. Calvert Opinion No. WW-1517 Comptroller of Public Accounts Austin, Texas Re: Whether under the facts submitted, a corporation chartered by an association of teachers should pay the franchise taxrequired by Chapter 12, Title 122A, TaxationDear Mr. Calvert: General, V.C.S.

You have requested the opinion of this office concerning the liability for payment of franchise tax of a corporation chartered byan association of teachers, Your request included thepurpose clause of this corporation, which is as follows: "Section 1. To cooperate with the Texas

State Teachers Association and theNational Education Association in the promotion within the teaching group of thehighest type of professional practices; to encourage active participation of all teachers in the solution of school problems; to encourage every member tobe aprogressive student of education; and toarouse allegiance to a genuine code ofprofessional ethics."Section 2. To encourage higher qualifications for entrance into the teaching~profession; to guide well endowed young people to select teaching as a life,work; to improve the~social and economic,status of teachers; and to form a representative body able to speak with,authority for them.

"Section 3. To promote, encourage and assist other local teacher organizations and to promote cooperation among such organizations and their members.Honorable Robert S.Calvert, Page 2 (WW-1517)

"Section 4. To cooperate with parentteacher associations and other civic bodies having educational objectives and toaid in interpreting to the public the problems, the functions, and the steady progress of the public schools.

"Section 5. To encourage teachers to exercise their rights and privileges as citizens and to accept willingly leadership in civic affairs."
We understand fromyour request that this corporation was organized under the Texas Non-Profit Corporation Act, Chapter 9,Title 32,Vernon's Civil Statutes. There isno provision exempting all such corporations from payment of franchise tax.

Article 12.01, Taxation-General V.C.S., asamended Acts 1961, 57th Leg., p. 182, ch. 97, 81,provides that:

"(1) Except asherein provided, every domestic and foreign cornoration heretofzor hereafter chartered or authorized to inTexas or doing business inTexas, orbefore May 1st of eachyear, file as are required byArticle 12.08 and inadvance to the Secretary of State tax for the year following. o ." dobusiness shall, on such reports 12.19 and pay a franchise

Article 12.03, Taxation-General, V.C.S., lists anumber of exemptions from the franchise tax. Of the categories of corporations qualifying for exemption, the closest to the corporation inquestion are corporations organized for
"F-G= educational.purposes, or forpurely public charity," (mp asis added.)

Two fundamental principles,should benoted here. As pointed out inAttorney General's Opinion No. O-4137, wherein aquestion similar to the present onewas discussed, "It is too fundamental to require the citation of authorities that one~claiming an exemptionsfrom the payment of taxes must clearly come within the exemptions.therefrom provided by the law." The rule that indetermining the~effect of a statute, every word ispresumed,to have apurpose and eachword should be given effect, was clearly stated in Eddins-Walcher Butane co.V. Calvert, 156Tex. 587, 298 S.W.2d 93 (1957).Honorable Robert S.Calvert, Page 3 (ww-1517)

Giving effect to thewords "strictly" and "purely" as used inArticle 12.03, it isapparent from the above purpose clause that the corporation inquestion will not comewithin the exemptions set out inthatArticle.

Section 1of thepurpose clause is clearly aprofessional purpose, designed to improve the quality of the teaching profession. Section 2ismuch the same, but provides for improving the "social and economic status of teachers" and for forming "arepresentative body able to speakwith authority for them." These sections, together with Section 3, indicate a purpose and function of the corporation not significantly different from those of other professional and trade associations, i.e., tobetter the social and economic conditions of their members.

Section 4 is,by itself, more nearly an educational purpose, and Section 5suggests the encouragement ofgeneral civil responsibility among teachers.

While teachers are educators and are employed primarily to educate, thepurpose clause of the corporation considered here reveals that the corporation itself was not organized for %;~;C;;, educational purposes, or for

e corporation does not qualify franchise tax.

SUMMARY

Under the submitted facts, a corporation organized byan association of teachers, the purpose ofwhich isneither strictly educational norpurely public charity, isnot exempt from payment of the corporation franchise tax.
Yours very truly,
WILL WILSON Attorney General ofTexas 

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Assistant Attorniy &&era1
JAP:caHonorable Robert S. Calvert, Page I, ww-1517)

APPROVED: OPINION COMMITTEE W.V. Geppert, Chairman Norman Suarez W. 0. Shultz CecilRostch
REVIEWED FORTHE'ATTORNEY GENERAL BY Leonard Passmore