Court Opinion

ID: 4133839
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:42:46.966446+00
Date Added: 2024-06-11T09:36:22.402049
License: Public Domain

April 6, 1971

Honorable Robert S. Cslvert              Opinion   No. M-829
comptroller  of Public Accounts
State Finance Building                   Re:   Construction    of Article
Austin, Texas                                  12.02(l)(b)(l),    Texas
                                               Franchlw Tax Act., con-
                                               cerning     inclueion      of
                                               certain  eales under “grose
                                               receipts  from buelnear done
                                               in Texas,” and effeot   upon
                                               Attorney  Oeneralta Opinion
Dear Mr. Calvert:                              ~~-1503 (1962).
         In’ our recent opinion ,request you ask if Article      12.02
 (l)(b)(lj,    Title 122A,, Taxation-General,    Vernon’s Civil Statutes,
 aa amended In 1969, changes the result .reached In Attorney Oeneral
 Opinion NO. W-1503 (1962).         In that opinion the question wait
 whether kecelpts from sales of .petroleum products rafined in Texas
 and sold and shipped to out-of-state       purchesers,   with. passage of
 Title F.O.B. the loading points at Corpus Christ1 and Port Isabel,
,were receipts     from business done in Texas.     The conclusion    was
 reached. that such reoeipts     were not receipt8    from buelneee done In
 Texae under this Article      12.02 which then read, in part, a8 followe:
            “For the purpose of ihis Article,    the term
              ‘gross receipts  from Its business  done in
             Texas” shal~l Include:

            “(e)    Seles of tangible personal property
             located within Texas at the time of the
              receipt of or’ approprlatlon  to the orders where
              shipment is made to points within this State,”
      Article   12.02,   es amended in 1969,       reads   In Its      pertinent
 part a8 follows:

                                -4017-
Honorable Roljert   8. Celvert,    page 2 (n- 829)

           “(1)     (‘e) Each corporation   liable   for payment
            of 8 frenchlee      tax shell detennlne the portion
            of its entire texeble capital         taxable by the
            State of Texas by multiplying         same by en
            sllocstion     percentege   which shell be thee percentage
             reletlonshlp    which the gross receipt8      from
             its bualness done In Texas bear to the total gross
             raoelpta of the corporstlon       from   Its entire
             business.
            “(b)   For the purpose     of this Article,  the
              term ‘gross receipts     from Its business done In
             Texas’ shell Include:
            “(I)   sales of tanglb~le personal property
             when the property Is delivered    or shipped
             to e purchaser within this State, regardless           of
             the F.O.B.  point or other conditions     of
             the sale, reduced by the deduction,      If
             applicable,  allowable  under,Subsectlon     (c)
             of this Section   (1); . . .I’.

      Article   12.02(1)(b)(I)      now provides that receipts      from
sales of tangible personal property ere Included where dellve
IS made to e purchseer within this state regardless             of d
   it     Th        ti    h     I      h th    d  11     h    been mMle 01
meum         ~r%%s”~hl~~~d        i.z.i.    Tied&‘;%t’to       purchasers
outside 6f Texas.       It IS the opinion of this office        thet such
products shipped F.O.B. shipping point do not constitute               dellveq
to a purchaser within this state under Article ‘12.02(l)(b)(l),
as the provision     clearly   contemplates      that the F.O.B. point
shall not control and that the point where the purcheser actually
takes poasesslon of the property shall be the place of dellverx
t’or purposes of this statute.

      It should be here noted thet the reesonilig of Opinion No.
W-1503, supra, no longer applies to Article        12.02, since that
statute as emended clearly    covers both lntra end Interstate
business to the extent thereln provided.        Sales of tangible
personal property delivered     in Texas are considered   business
done In Texas even though such sales ere made 1~ Interstate
commerce. Therefore,     It Is the point of actual delivery      rather
than the point of origin    that controls    the question of whether
the receipts   from sales of tenglble    personal property are con-
sidered receipts   from business done in Texas.

                                  -4018-
Honoreble Robert S. Calvert,     page 3             (M-829)

                        SUMMARY

     Petroleum products ahlpped to out of state purchasers
     from polnta within this State with F.O.B. loading points
     within Texes, do not constitute     receipts   from business
     done In Tejtas under Article   12.92, Title 122A, Taxatlon-
     General, V.C.S. because under the amended statute the
     physical possession,   which Is the controlling       factor,    occurs
     outside Texas.    However, ~seles  of  such  tangible    pro;erty
     delivered  to Texas ere considered     buslnaea done In Texes
     even though such sales ere made in Interstate         dommerce.
     Therefore,  the reaaonln    or basis of Attorney Oeneral
     Opinion No. ww-1503 (1922) 1a no longer valid or applicable
     although the result therein reached Is not changed.
                                Yours very truly,

                                CRAWFORD C. MARTIN
                                Attorney General

                                ma> First   Assletent
Prepared by Wardlow Lane
Assistant Attorney General

APPROVED:
OPINIONCOMMITTEE
Kerns Teylor, Chairman
W. E. Allen, Co-Chalrmsn

S. J. Aronaon
Ivan Wllllama
John Reese
James Mabry
KEADEF. GRIFFIN
Staff Lagal Assistant
ALFRED WALKER
Executive   Assistant

                               -4019-