Honorable Joe Fultz 

'County Attorney 

Grimes County 

Anderson, Texas 

Dear Sir: 

Opinion No. O-3849 

Re: Is Grimes County entitled 

to an exemption from the 

payment of the State tax 

of eight cents per gallon 

on the distillate it purCha&?S? 

We are in receipt of your letter of August 2, 1941, in 

which you request the opinion of this department upon the question 

set out therein as follows: 

"Grimes County purchases quantities of distillate 

for use in its tractors. These tractors are used in 

the construction and maintenance of county lateral 

roads. 

"Is Grimes County entitled to an exemption from 

the payment of the State tax of eight cents (8{) per 

gallon on the Distillate it purchases?" 

The following portions of Article XVII of House Bill 8, 

Acts of the Forty-seventh Legislature, 1941, are pertinent to your 

inquiry. 

"Section 1. The following words, terms and 

phrases shall, for all purposes of this Article, be 

defined as follows: 

“X * * 

"(c) 'Other liquid fuels' shall mean any liquid 

petroleum products, or substitute therefor, having a 

flash point above one hundred and twelve (112) degrees 

Fahrenheit, according to the United States official 

closed testing cup method of the United States Bureau 

of Mines, including diesel fuel, kerosene, distillate, 
Honorable Joe FultZ,-Page 2 (C-%49) 

condensate, or similar products that may be used as fuel 

to generate power for the propulsion of motor vehicles 

upon the highways of this State. 

w * * * 

"(i) 'Person' shall mean and include every individual, 

firm, association, joint stock company, syndicate, copartnerehip, corporation (public, private, or municipal), trustee, agency, or receiver. 

"Section 14. (a) From and after the effective date 

of this Article, there shall be and is hereby levied and 

imposed an excise tax of four (4) cents per gallon, or 

fractional part thereof, on all users of liquefied gases, 

and eight (8) cents per gallon, or fractional part thereof, on all users of other liquid fuels, upon the use of 

such liquefied gases and other liquid fuels by any person 

within this State only when such liquefied gases and other 

liquid fuels are used in an internal combustion engine for 

the generation of power to propel motor vehicles upon the 

public highways of this State. The said tax shall be computed and paid to the State of Texas through the Comptroller at the time and in the manner hereinafter provided." 

(Underlining ours) 

Prior to the enactment of House Bill 8, supra, the Motor 

Fuel Tax Law was codified into Vernon's as Article 7065a-1, and 

contained the following definition: 

"(e) 'Person' shall mean and include every individual, 

firm, association, joint stock company, syndicate, co-partnership, corporation, trustee, agency or receiver." 

The above quoted portfon of the Motor Fuel Act was construed by the Supreme Court of Texas in the case of State Y. City 

of El Paso, 143 S.W. (2d) 366, in an opinion written by Justice 

Critz. In that case the court discussed the question of whether 

or not the Constitution of Texas prohibits the assessment of a 

use tax on motor fuel against a municipal corporation, and stated 

as follows: 

"A careful examination of our Constitution discloses that the only inhibitions, restrains, or exemptions contained therein with reference to munici,pal 

corporations are found in Section 1 of Article VIII 

and Section p of Article XI, Vernon's Annotated St. 

Const. 
Honorable Joe Fultz, Page 3 (0-3849) 

"So far as pertinent here, Section 1 of Article 

VIII of our Constitution provides: 'Section 1. * * * 

All property in this State, whether owned by natural 

persons or corporation, other than municipal, shall 

be taxed in proportion to its value. * * * It may 

also impose occupation taxes, both upon natural persons and upon corporations, other than municipal 

* * x, It may also tax incomes of both natural persons and corporations other than municipal, * * *..I 

"Section 9 of Article XI of our Constitution 

reads as follows: 'Sec. y. The property of counties, cities and towns, owned and held only for public purposes, such as public buildings and the sites 

therefor. Fire engines and the furniture thereof, 

and all property used, or intended for extinguishing 

fires, public grounds and all other property devoted 

exclusively to the use and benefit of the public shall 

be exempt from forced sale and from taxation, provided, 

nothing herein shall prevent the enforcement of the 

vendors lien, the mechanics or builders lien, or other 

liens now existing.' 

"An examination of the above-quoted constitutional 

provisions discloses that they operate to exempt municipal corporations from only three classes of taxes. 

These are ad valorem taxes, occupation taxes, and income taxes. It is too plain to admit of debate that 

the taxes here sought to be recovered by the State are 

not ad valorem or income taxes. We are therefore left 

to determine only the question as to whether or not they 

are occupation taxes. Of course, if they are occupati,on 

taxes, the City is exempt under Section 1 of Article VIII 

of our Constitution, supra. 

"* * * It follows that the tax here sued for is 

manifestly a tax on using motor fuel in the operation 

of Eotor vehicles on the public highways of this State. 

Such tax is an indirect or excise tax. This being true, 

the constitutional exemption of municipal corporati~ons 

fron. occupation taxes cannot apply." 

In requiring the City of El Paso to pay the use tax on the motor 

fuel it used, the court stated as follows: 

11 + *. * We think the statutory definition of 'Person, 1 as contained in subdivision (e) of Article 7065a-1, 

covers all corporations or agencies which actually sell 

motor fuel in Texas. This being true, the statute also 
Honorable Joe Fultz, Page 4 (O-3849) 

covers all corporations or agencies which use motor 

fue,l when there is absent an actual sale in this State." 

(Untierlining ours) 

Apparently In line with the Supreme Court's construction 

the Legislature defined the term "Person" in paragraph (I), Section 1 of Article XVII, supra, to include public, private or municipal corporations. 

The Constitution of Texas seems to recognize that a county 

is a municipal corporation. Section 3 of Article XI provides as 

follows: 

"No county, city or other municipal corporation 

shall hereafter become a subscriber to the capital of 

any private corporation or association, or make any 

appropriation or donation to the same, or in anywise 

loan its credit; * * *" (Underlining ours) 

Article 1572 of the Revised Civil Statutes provides as 

follows: 

"Each county which now exists or which may be 

hereafter established, shall be a body corporate and 

politic." 

The courts of many states have passed on the question 

of whether or not a county is a municipal corporation. Some cases 

hold a county to be a municipal corporation, others hold it to 

be a public corporation, and still others hold it to be a quasi 

public corporation. 

The decisions of the courts of this State are not clear 

on this point but we believe that the weight of authori,ty is that 

construilg the above quoted Consti,tutional provision and statute, 

a county is either a public or municipal corporation. 

The Supreme Court of Texas in the case of Bexar County 

vs. Lindsn, 220 S.W. 761, in referring to Secti.on 51 of Arti,cle 

III of the Constitution of Texas stated as follows: 

"The giving away of public money, its application to other than strictly governmental purposes, is 

what the provision is intended ,to mar-d against. The 

prohibition is a positive and absolute one except as 

to a distinctive class to whom the State is under a 

sacred obligation. Not only are individuals, associations of individuals and private corporations within 

its spirit, but all kinds of public or political corporations, as well, whether strictly municipal or not. 
Honorable Joe Fultz, Page 5 (O-3849) 

It therefore applies to counties, whether considered 

as public corporations or only quasi corporations. The 

Similar restraints upon the use of public funds and the 

public credit applied to counties by these other provisions of the Constitution practically demonstrate this 

to be true." 

The San Antonio Court of Civil Appeals in the case of 

Brite V. Atascosa County, 247 S. W. 878 in an opinion written by 

Chief Justice Fly stated as follows: 

I, . . . The statute (Article 1365) expressly makes 

each county a body corporate and politic, and as such 

it undoubtedly had the power and authority to institute 

suits and defend against those brought against it. The 

Constitution of Texas recognizes counties as municipal 

corporations along with cities and towns. . . .II 

The Eastlsnd Court of Civil Appeals in the case of City 

of Abilene V. State, 113 S. W. (2d) 631, stated as follows: 

"Counties, cities, and towns are municipal corporations. Const. Art. 11. They are political subdivisions of the state. Id. Corporation of San Felipe de 

Austin Y. State of Texas. 111Tex. 108, 229 S.W. 845. 

* * *'I 

It is the opinion of this department that the definition 

of the term "Person" in House Bill 8, supra, includes a county 

so as to require a county that uses distillate in one of its motor 

vehicles to pay the tax imposed by Article XVII, Section 14(a) 

of said Rouse Bill 8. 

APPROVED AUG 14, 1941 

/s/ Robert E. Kepke 

ACTING ATTORNEY GENERAL OF TEXAS 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

APPROVED 

OPINION 

COMMITTEE 

By /s/ Billy Goldberg 

Billy Goldberg 

Assistant 

BG:eaw:lm 

BY /s/ G.W.S. 

CHAlRMAN