Honorable Geo. 

Comptroller of 

Austin, Texas 

H. Sheppard 

Public Accounts 

Dear Mr. Sheppard: Opinion No. 054OC 

Re: Construction of Senate Bill 

No. 2, Acts Regular Session 

48th Legislature. 

This will acknowledge receipt of your letter of 

June lsth, requesting the opinion of this Department as to 

whether Senate Bill No. 2, Acts of the 48th Legislature, 

authorizes and requires all officers and employees of this 

State and its agencies, instrumentalities, political subdivisicqs, and municipalities to comply with the withholding provisions of the "Current Tax Payment Act of’_1943.” 

Senate Bill No. 2 reads as follows: 

"An ACT requiring all officers and employees of the 

State, its agencies, instrumentalities, political subdivisions and municipalities, having con-. 

trol over the payment of any salaries or wages 

to public officers or employees, to comply with 

the provisions of the Federal Revenue *ct of 

1942 reouiring the withholding cf the five per 

cent (s$) F e d era1 Victory Income Tax from wages 

paid public officers and employees so lorgas 

the United States of America is at war with Germany, Japan or Italy; and declaring an emergency. 

"BE IT ENACTED BY THE LEGISLATURE CF THE STATE CF TEXAS 

"Section 1. For the duration of the present war, 

all officers and employees of this State and its agencies, instrumentalities, political subdivisions and 

municipalities, having control over the payment cf 

any salariesor wages to public or'ficers or employeee, 

are hereby authorized and required to comply with the 
. ‘. 

\ 

Honorable Geo. H. Sheppard - page i?O-5408 

provisions of the tiedera Internal Revenue Act 

of 1942, re uiring-the withholding of the five 

per cent (50) 7 Federal Victory Income Tax from 

wages paid public officers and employees. Any 

expenses involved in complying with the ;;rovisions of this law may be paid from existing or 

future appropriations. The provislcns ci‘ this 

Act shall be in force and effect only so long 

as the United States of America is at war with 

Germany, Japan or Italy. 

"Sec. 2. The fact that there is doubt as 

to the authority of the Federal Government tc 

impose duties on State officers and employees, 

as such, without the consent of the State, and 

the State of Texas being desirous of cooperating 

to the fullest degree' with the Federal Government in its effort to collect taxes to finance 

the war effort, creates an emergency and an imperative public necessity that the Ccnstitutional Rule requiring bills to be read on three several days in each House he suspended, and said Rule 

is hereby suspended, and that this Act shall take 

effect,from and after its passage, sold it is so 

enacted." 

We quote the following paragraph from your letter: 

"The Congress has recently enacted what is 

commonly referred to as the 'Current T&u Payment 

Act of 1943,' which provides fcr the current collection of income taxes on individuals ,which are 

already imposed by the Internal :icvcnue Code. No 

new taxes are imposed by this Act nor are any 

old ones removed. This Act will effect the collection of tax as income as earned. The 'Current Tax Payment Act of 1943' changes the method 

in collecting Federal Victory Income Taxes and, 

in effect, substitutes therefor the currc~:i; j:ayment of income taxes." 

We think it clear that the reference in S. B. No. 

2 to the provisions of the Federal Internal Revenue Act of 

1942 was not intended to restrict the application of the 

policy adopted by the Legislature of co-operation with the 

Federal Government in the collection of taxes during C.' 3L::-- 
i ’ 

. 

Honorable Geo. H. Sheppard - page 3 0-5408 

istence of the present war, to the provisions of that particular enactment, Rather, the reference to the Federal Internal 

Revenue Act of 1942 was merely for the purpose of identification of the policy enacted by the Federal Congress with respect to withholding taxes from wages paid public officers 

and employees, with which policy the Legislature of this State 

determined, by 9. B. No. 2, to co-operate. 

This, we think, is made clear by observing that the 

State could have legitimate concern only with the question 

whether its public officers and employees, ns such, should be 

required to assume the obligation to the Federal Government 

of withholding from salaries or wages paid to public officials 

and employees taxes on income due to the Federal Government 

under the laws promulgated by the Congress of the United 

States, Other provisions of the law could not legitimately 

ccncern the State as such, for the State's action or non-action 

could not reduce the liability of the officers and employees of 

the State to the Federal Government for inccme taxes due cn salaries or wages earned by them, nor could the State, 'by action 

or non-action, in anywise impede or restrict the operation of 

provisions of the Federal Taxing Act affecting public officers 

and employees in their Eapacity as private citizens, 

These observations make it plain that the only object 

or purpose of the passage of 9. B. No. 2 was to give the consent of the State that the Federal Government might impose the 

duty on State officers and employees as such to withhold, at 

the source, from salaries and wages paid to public officers 

and employees, income taxes assessed by the Federal Government, 

That this is the true object and purpose of the enactment is 

emphasized by the recitations of the emergency clause,, incorporated in Section 2 of the enactment. 

To reach any other conclusion we must attribute to 

the Legislature the intent to do-operate with the Federal i, 

Government only in the collection of the "Victory" Income "ax 

in the amount of five per cent, iif! more a& no less,as such 

tax is provided fnn the Internalxenue Kt of 1942, and 

in no other act of the Congress, Such construction would F --- 

Fire the holding that, if the Congress, inthe Internal Revenue Act of 1943$ should reduce the Victory Income Tax to one 

per cent or raise it to seven per cent, the legislative clsent given in S. B. No, mshould not apply, To give the Act 

such a narrow and literalistic interpretation is to observe 

the form and ignore the substance,: Rather, rye think', the i4ct 
’ L 

. 

Honorable Geo. H. Sheppard - page 4 O-5408 

evinces a legislative intent to give its consent that the Congress, during the war, may require officers and employees of 

this State and its instrumentalities having control as such 

ever the payment of salaries and wages to withhold from such 

wages and salaries Federal income taxes assessed therecn 

against the persons to whom the wages or salaries are due. 

Since the chief effect of the Current T,ax Payment 

Act of 1943 'to apply the withholdin; provisions of the 

Federal Internal Revenue Act of 1942 not only to the Federal 

Victory Income Tax, but also to taxes on incoce ,zenerally, 

you are advised that, in the opinion of this del,artnent, S. B. 

No. 2. required all officers and employees of this State, its 

agencies, instrumentalities, political subdivisions, and 

municipalities, to comply with the withholding prcvisio?s of 

the Current Tax Payment Act of 1943* 

Very truly yours 

ATTORNEY GENERAL OF TEXAS 

BY R. W. Fairchild 

RWF-MR/X/pam 

APPROVED July 1, 1943 

GERALD C. MANN 

ATTORNEY GENERAL OF TEXAS 
r 

IT:P:T:2 

RFD-5 

o-5408 

Treasury Department 

EY$:":9$; 

Collector 

Post Office Box 1150 

Austin, Texas 

Reference is made to your letter dated February 18, 

1947, transmitting a letter dated February 11, 1947 from Charles B. 

Mbcre, State Representative of,.the 87th Legislative District of 'fexas, 

concerning the withholding of Federal Income Tax on &Cl.00 

per day received by Members of the State Senate and 'louse of "epresenta, 

tivesi,jwhile attending sessions of the State Legislature at Austin, Texas. r. Moore inquires W-War or not the per diem of $10.00 

per day is subject to withholding tax. 

The per diem in question is authorized by Article III, Secti .on 24 of the Constitution of Texas, 

DJ -em." 

entitled *Uleage and Per 

This article authorizes, in addition to mileage, the 

to Aembers of the Legislature of a per diem of not exceeding i 

ayment 

10.00 

per day for the ,first 120 days of each session and after that no exceeding $5.00 per da:: for the rema??!gr of the session. 

While the article referred to does not specifically state 

the $10.00 per diem to be in lieu of subsistence, it ap:ears that it 

was intended to compensate legislators for expenses incurred while attneding sessions of the Legislature in Austin, Texas. 

Accordingly, this cffice holdsthat the per diem allowance 

paid under the provisions of Article III, Section 24 of the Gonstitution of Texas, entitled "Mileage and Per Diem" does not ccnstitute 

"wages" within the meaning of section 1621 of the Internal Revenue 

Code and is not subject to withholding of Federal income tax at 

source under section 1622 of the Code. 

The per idem allowance should, however, be included in gross 

income for Federal income tax purposeg. In computing net income, 

such part of the allowance as is expenued in connection with the 

performance of official duties may be taken as a deduction under 

Section 23(a)(l)(A) of the Internal Revenue Code. 

(Signed) E. L. McLarney 

Deputy Commiss$oner 
. 

O-5408 

FBP:sc///PAM March 7, 1947 

Honorable Charles 3. Moore 

House of Representatives 

State Capitol 

Austin, Texas 

Dear Mr. Moore: 

Reference is made to your letter of the 11th ultimo, 

addressed to me concerning the taxability of the 

$10.00 per day.received by Members of the Legislature 

as per diem while attending the State Legislature, 

with special reference as to whether this $10.00 is 

subject to withholding tax, 

You are advised that I submitted this question to the 

"egal Department of the Bureau of Internal Revenue at 

Washington, D. C. for an opigion. I am enclosing you 

a copy of the decision dated March 4, 1947. You will 

note that this opinion holds yhat the $10.00 per diem 

is not subject to withholding tax. You will also 

note in the last paragraph of this opinion that the 

ruling holds that the $lO.OO:*sh~iUd be included in 

gross income for b'ederal Income Tax purposes and that 

deductions may be taken in connection with performance 

of official duties as provided in section 23 (a) (l)(A) 

of the Internal Revenue Code, 

A copy of this letter and a copy of the ruling is being furnished to Honorable Price paniels, Attorney 

General of Texas, and "onoPable George H, Sheppard, 

Comptroller of Public Accounts, that these officials 

may be guided accordingly. 

Very truly yours, 

(Signed) 

Frank Scofield, 

Collector 

Encl. 1 

cc/Honorable Price Daniels 

Honorable George H. Sheppard 

c