Court Opinion

ID: 4144818
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:49:46.089706+00
Date Added: 2024-06-11T13:14:04.089865
License: Public Domain

816

    OFFICE OF THE AlTORNEY GENERAL OF TEXAS
                      AUSTIN

&xsorobla Y. 0. Flower8
se~e~r;yof~statl
      *
Doa! Sir;         Attsntionl I&.
                  iittormyp

                                          x levied   by raid

                                     oorporatloar    under
                                    of ArtIsle    7lo5,
                                   are now paying their
                              r the terse and provirriona
                              di~hi0n    f~) R. c. s. 0r
                              h of thr total    amount of

                     ohacked R nwabsr or tham oor-
                  et contend they ars required to
    ~~'intangibJ.ataror and find that in truth
    on& In taot they are not pejizg     any lataaglbla
    taxes, ncrsrthalasr,    payiq  only 115th of their
    gnahlae    taral umlar Artlola    7084, Bubdlrlaion
        .
Eonorabls IL Q. Plowers, ps::t 2

          "~looe% 5llOw WI t0 direct your ott6R-
     tlon to ths r0ii0viingunderllnsd portion of
     Article 7284, Subdlvlalon (E), 8. C. S. of
     Tuoa, *(b) CorPoratIona whloh --are now re-
     ~gi$l~O~t~       ,J?-%e"g!!!~lge~~
     the tarmTTKls     partioiilaratntute it ~a8
     the purpose 6nQ intention of the L6gii3l6tUr6
     to persit these corporatlcns W.-pay 1/5t.h
     Of their franchise tsxas, u&see they me
     &Ctllallypayin intangibls taX6s. W4 under-
     stand a nuaber tf thes6 corporatlone contend
     for varloar r4asc.m they do not ova lntan-
     gibls taxes, when aasoss%d by tho Intsngiblr
     Tax Eoard, and at the saae tlmr prspare and
     file their franchlee tax return with thle
     department classifying themselyes ee corpora-
     tions required to pay the intangIble ter.
               "x6 will apprdolate your answer   to th%
     r0ihing        question:
                    "Doe% a corporation have to
               pay ennuallp lntarqlble taxes upon
               Intangible asrrets before bolng an-
               titl%d to tb6 4/5tha redUOtiOn   Of
               Its franahlse tax64 under Artlale
               7084, Sub&lvlrlon   (b), R. C. S. of
               Tares?"
          Artiole 7105, Vernon*s Annotated Clyll Stetutelr,
larlee an Intangible tax upon oertaln Remed corporationa
in the foll~wlng lnnguage:
            Taoh lnaorporet%d railroad co3lgany,
     forry ocmpany, bridge oou;pany,turnpike
     or toll oomppany,011 pip6 line aompany,
     and all uommon oerrier pip4 llna ooqwmiea
     Of  6Y6ry  UhharaOt%r Wh?lllte!OeY%r, %II@g%d ia
     tb6 traneportatlan of Oil,        aO*   basinads
     vbolly or in part within this State, vhetb
     er inaorporeted.undar the laws ot this Stat%,
     or or any other State, t%rrltAW, Of fore&n
     aountry, snd every other lndiyldual, OoWmnuIJ~
     corporation or assooiation doing busin%se of
     the same chareater in thle State, in 0dditiOll
     to the ad oelorem tares >n tangibl% proper-
SionorebleM. 0. FU~~6rst 95%     3

        tie8 which era or say be lrspoaadupon them
        rospectloaly, by lew, shall pay en ennuel
        tax to th6 State, beginning with the iirat
        dey Of Ja2IUarg   Of each yaor, 013 t?6ir ln-
        tan@bl% asset% and proptrty, an4 local
        term thereon to the counties in uhich
        its business Is aarrldd on; uhlch addltlonel
        tax shell bs eas%ss%d and lavl%d upon suah
        Intangible asasts md property in the men-
        ner prorICed In this cheptor. The county
        or oountlcs in which such texss era to be
        paid, en4 tha manner o? epportionment or
        the 8890, rh%ll b6 dstarmln64 in eaoor4ence
        wlth th6 prOViSiOn%    Of thiS chapter.”

          Subdivision (B), Artiala 7084, VeruoaL'eAnno-
ktted Clril Statutes, or4et48 a pert161 sxemption in
ieyor o? oarteln oorporatloca ?roa the tex lcrled by
subdlvlslon (A) o? said franahlse tex statute, whloh
examptlon reads es iollans:
             '(B) Corporationa whlc);are now ra-
        qu5rad by law to pay annually a tax upon
        lntenglbl% aaaets, oorporatlona owning or
        operetlng rtreat rallwa~tiin or upon th%
        public strsati o? any touQ or efty, en4
        oorporatlons organlzab to meintaln or own-
        ing or operating aleotrlo interurban reil-
        vfiya,shell be raqulrad to hsraafter pa
        a rrenohlad tax aqua1 to one-flrth (I./57
        o? th6 franahlza tax h6r%in lmpos~d qeiDSt
        all other aor~retlons under Section (A)
        h6r4ln.c
          The aorpomtion   In question aon@nde ?or the
right to at&s a Trmahlss tax return en4 peym6nt on th%
beais of one-Slith o? tha total ?renahl%% tax l%yl%d by
subdiylslon (A), Artials 7084, Vernon's ,knWzdsd Clril
Statutes, end pal4 by tha corporations therein -%4.
Thla parttal axamption is eaaarta4 under aubdiyiaian
 (B) o? the frenehlss tex atatuts next above quoted, an4
is deubtlaes upon the theory that the m6r% nemlng o?
such corporatlonn in hrtlala 7105, Vernon*8 Annotatatl
Cfvil Statutas, as bolng pot%ntlelly subject to an ad
ralorem tax on intanglbla essota, brings th%m squer%lp
Honorable M. 0. Plovers, page 4

within the purview of this partial exemption from ths
franGhise tax.
             With this contention we cannot agree. It la
Our   conolusion that there must rest upon the oorpora-
tione    Olaking this partial exemption from franchise
taxes, en aatual annual llablllty for en ad .valorem
tax On their lntenglble asasts, rather than a mere
theoretical or potential liability for such taxes. In
other words, not all of the corporations described in
Arti       7105, Vernon’s Annotated Civil Statutes, become
liable each year to this tax on Intangible assets, as
such liability dependa upon the facts appearing in the
COrpOret8    statement required by Article 7106 and Article
7lO7, Vernon’s Annotated Civil Statutea, and the msthod
of computation fbllowed by the Intangible Tax Board in
arriving at such tax liability for any given year. It,
under all of the pertinent articles of’Chapter 4, Title
122, Vernon’s Annotated Civil Statutes, conoerning the
levy, assessment and oollection of taxas on -tangible
assets, no such tax is oertifled by the Intangible Tax
Board to the assessors of the various counties of Texas
against any given corporation for a partloular year, then
how can it reasonably be said that such corporation is
*required by law to pay annually a tax upon intangible
assets* within the language of subdivision (B), Axtfols
7084, Vernon’s Annotated Civil Statutes, so as to al-
low such corporation to pay its franohise taxes on the
basis of one-fifth of the total tar levied? In determ-
ining whether or not a oertaln corporation is “required
by law to pay annually a tax upon Intangible aaaets,*
it ia neoesaary to refer to all of the pertinent statutes’
for the assessment end oaloulatlon of such tax, beoauae
Article 7105, Vernon’s Annotated Civil Statutea, in levy-
ing said tax, provides that *suoh additionel tax shall be
assessed and levled upon such intangible assets and proper-
ty in the manner provided in this ohapter.”
          This oonolusion is without ths benefit of support-
ing authorities, beaause this ia en open quea~ion in Texas;
being relegated to the bare text of the etatUt inmlrsd,
we are constrained to sooord to such statute   a reasonable.
rather than an unreasonable, construotion,   end we, feel that
the foregoing conclusion end an errirmative answer to your
question 1s the only reasonable’Construation.
Honorable    ki. 0. Flowers,     page    5

              Tbo manifest @mpose of subdlvlsion              (B). Art-
lole 7084, Vernon*s Annotatad Clril            Statutes,      Is to
lessen    to tbe extent of four-fifths         the franohlrre      tax
burden resting      upon eorpoTatlaus      which w6ro likewise
liable    ror tax on tbolr lntanglble        assets.      If,   from
oontrolllng     statutes,     it eppsars that no assessment           ror
suoh lisxon the intangible assets of said oorpora%lons
Is OS can ba oertlflod          by the Intangible     Tax Board to
the proper     tax officials      of the various     oountiee     In whloh
the property      of the oorporatloa      is found, then such oor-
poratlon     does not have to pay the eddltlonal            tax oa
intangible     aeeeta and the reason for the exemption
of such corporetlon        from the payment of four-fifths
of ita franchise       taxer no longer obtains.
           To ellw   suoh oorpontlon    to pay only one-lift&
of the rranohls6 tu     lsrled against it, whlle other oar-
poratlonci ,arapaying such rranahi8e    tu in It6 entlretr,
would be to oonter a gratuity    or gift upon such oorpom-
tion, and the intention    to do this Ml1 not be aaorlbed
to the Legislatare,   absent lauguaga l.n the statute   oom-
pelllug such oonstmotlo~.
                                        Tours   vary   truly

                                  BT