1 243 

THEA~TORNEY GENERAL 

~IFTEXA~ 

Aven~. TEXAR 

pRIa.xs DANl -ìm--= 

August 5, 1948 

Hon. Geo. H. Sheppard ‘~ Opinion No. V-648 

Comptroller of Public Accounts 

Austin, Texas Re: Taxable ata@~~ of certain 

types of stock transfers 

to and from ‘Szustodians.’ 

Dear Mr, Sheppard: 

. . 

You-r~qu@?ur.opinion as tp what+ th?, stock t+~sfer tax levied under .Article 15 ,of H. B. N6. 8; 47th L~gislatnrq, -as 

amended by S. 8.. 141; SOtkLigislaturc, would acckne in the fqU.owing types’of transfers: 

,: .:. ~. 

.%. From ihe ~iarne of-an owner tq the name~,of 

a i&nine~ of a ‘custodian. 

“2. From ,thg aame.of a nomin+ of a custqdian 

! back to the name of w owner +r whom. tba 

-nomixiTe b+d held the sba+vzs. . . ‘~ .’ 

.~~.Z. 

.t$. ~From.tbe +me.of one’nominee ef..a cust+ 

dian to the x+me of another nominq of the 

name custodian. 

“4.. From ihe~ name of a nominee of a curtpdi~~~ 

: tom the name’ .&f a, nominee oJ a ~7 cw t&an 

.foctha sauiq~gtier,m 

‘The Texas-Stqck Transfer Tax~Act is eodvisd’rs Article 7047xi and ieads,.:in past, as ‘f~llonsr 

., .,T~.,. 

%+ctlon L ,,8There is hj?reby,ixn&sed and~l&ied 

a tak as .hereilufter provided. eon all,sal+j agreoriqbts 

to sell1 or ti6moranda of sales: and all deliveriis im 

. transfers of sharesi or.certificates of stock; or certificates:for.i$jlhts to atock; or certificates of deposit 

. rsprssenting +x8 iatetcst ia ar reprisen%ing~~crtJficat~s 

made taxable uixd+r this~sectio~ in any dauytic or foreign.issociation, Citipany, or corporatfon; or’cartiffcates of interest in any~basiaass:conducted by trustee 

or trustees made ‘after the affective date hereof,‘whethcr made upon or shown by the books of the association, 

company. corporation, or trustee, or by any assignment 
244 Hon. Ceo. H. Sheppard, Page 2 (v-648) 

in blank or by any delivery of any papers or agreement or memorandum or other evidence of sale or 

transfer or order for or agreement to buy, whether 

intermediate or final, and whether investing the 

holder with the beneficial interest in or legal title 

to such stock or other certificate taxable hereunder, or with the possession or use thereof for any 

purpose, or to secure the future payment of money 

or the future transfer of any such stock, or certificate, on each hundred dollars~ of face value or fraction thereof. Three (3) Cents; except in cases’ where 

the shares or certificates are issued without dcsignated monetary value, in which case the tax shall 

be at the rate of Three (3) Cents for each and every 

share.. . . It is not intended by this Article~to impose a tax upon an agreement evidencing the deposit of certificates as collateral security for money 

loaned thereon, which certificates are not actually 

sold, nor upon such certificates so deposited, nor 

upon transfers of such certificates to the lender or 

to a nominee of the lender or from one nominee of 

the lender to another, provided the same continue 

to be held by such lender or nominee or nominees 

as collateral security as aforesaid: nor upon the retransfer of such certificates to the borrower; nor 

upon transfers of certificates from a fiduciary to 

a nominee of such fiduciary, or from one nominee 

of such fiduciary to another, provided the same COPtinue to be held by such nominee or nominees for 

the same purpose for which they would be held if 

retained by such fiduciary, or from the.nominee to 

such fiduciary; nor upon mere loans of stock or certificates, or the return thereof; nor upon deliver&s 

or transfers to a broker for sale; nor upon deliveries 

or transfer by a broker to a customer for whom and 

upon whose order he has purchased the same. but 

transfers to the lender, or to a nominee or nominees 

as aforesaid, or retransfers to the borrower or fiduciary: and deliveries or transfers to a broker for 

sale, or by a broker to a customer for whom and upon whose order he has purchased the same shall be 

accompanied by a certificate setting forth the fact; 

nor upon transfers or deliveries made pursuant to 

an order of the Federal Securities and Exchaage 

Commission which specifies and itemizes the securities ordered by it to be delivered or transferred 

(provided that this exemption shall not apply to such 

transfers or deliveries made before the passage of 

this Act)) nor upon record transfers following such 
Hon. Geo. H. Sheppard. Page 1, (v-648) 245 

transfers or deliveries; nor in respect to share.6 

or certificates of stock or certificates of rights 

to stocks, or certificates of depos.it representing 

certificates of the character taxcd.by this Article, 

in any domestic association, company, or corporation. if neither the sale, nor the order. for. nor agreement to buy, nor the, agreement to sell, asar 

the memorandum of sale. nor the delivery is made 

in this state and when no act necessary to effect 

the sale or transfer is done in this .state.. . .* 

Construing the entire act’as a whole, its seems clear 

to us that a tax is not imposed upon a transfer which does not involve a change of title or ownership, either legal or equitable. 

This taxing act is similar to the stock transfer tax acts of New 

York and Pennsylvania. ‘Both the New York and Pennsylvania 

acts have been construed to impose a tax only on tho~se transkrs 

which involve~a change of title. either legal or equitable. Iu prior 

Opinion No. O-3765 of this office we held: 

‘We therefore submit that a taxable traasaction or eventuality is created, under the Stock 

Transfer Tax Act, by either a~ ‘sale. agreement to 

sell, delivery or transfer upon thc~ books and records, of shares or certificates of stock, or cartificates for rights to stock, or certificates of deposit representing au interest iu stock, whether vesting in the transferee merely the legal title, or 

merely the equitable .trtle or beneficial interest, or, 

as m t.+ Fsuat ms stance, both the legal and eqm ble 

right, title and interest.* 

WA ‘nominee’ is syaoaymous with an agent . . . 

and is one who represents and acts for his principal.” 

B. F. Avery & SOBS Co. v. Glenn. 16 F. Supp. 544. 

It is therefore bur opinion. if neither the legal nor 

equitable title is transferred in the four types of traaskrs iuquired about by you, and the transferee in each instance continues 

to hold the shares or certificates for the same purpose for which 

they were held by the transferor, that such transfers are not taxable. 

SUMMARY 

A transfer of shares or certificates from 

the name of an owner to the name of a custodian, 

or from the name of an ovmer to the name of a nominee of a custodian, or from the name of a nominee 
246 Hon. Csob H. Sheppard, Page 4 (V-648) 

of a custodia%back tic the name’ of ths owner for 

whom the ti&nineb had hgld the shuts, or from 

the aanie ojl dniG&iiiea of a custcidi+~ to tae’ 

name of (Laotb& ~-tie of tbti, s&6 custodian, 

or fr&m th&, diti:.of ti nominee of,a custodian te 

the. name’ df, h~i&iiiioe ‘of a i+w ‘c%stpdian’ foi+b& 

sami. oivaer ‘ii’ p&:.$ax@l~ under thy Tees Stock 

Transfei Ta~~Aitf,~‘if ‘&dt&ei tbq legal nor ~eqoftable 

title, is transfii~dii and.th6 transferee in each’ini 

stance continues to,hold the shares or. certificates . 

for the same purpose for wbi+ they war? “ld by 

t.h&tmasfqor: “: ’ ‘. 

. 

;: h’ ~Ycnus very truly 

ATTORNEY &NEIUL OF TEXAS 

. 

BY 

W., V. Cieppert 

Assistant 

WVG/JCP 

APPROVED 

. 

. .