Court Opinion

ID: 4134094
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:45:55.883146+00
Date Added: 2024-06-11T14:35:08.135137
License: Public Domain

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                                                NEY     GENERAL,
                                      CD         EXAS
                                L%US’X’IN.     TEXAS    787
CHAWFORD         c.   XARTlN
      AlTORNEY   #3&NsmzAl-

                                             February 13, 1970

           Honorable Robert S. Calvert                  Opinion No.M-573
           Comptroller of Public Accounts
           State of Texas                               Re: Can new owner of
           Austin, Texas                                    store operate until
                                                            current license expires
                                                            without a transfer of
                                                            same on Comptrollerls
                                                            records, and does
                                                            Comptrollerhave author-
                                                            ity to transfer store
                                                            license when presented
                                                            after its expiration
           Dear Mr. Calvert:                                date?
                By recent letter you request of this office an opinion
           upon the following stated facts and questions:
                      In the case of Hurt et al vs. Cooper et al,
                 110 S.W.2d 896, the Court reached the conclusion
                 that the Store-Tax Law I.e. Chapter 17, Title
                 122A, Taxation-General,V.A.T.S. was an occupa-
                 tion tax. The Comptrollerallowed a transfer of
                 the Current License where a firm was purchased
                 during the year to the new ownership.
                 Cur opinion is requested on the following:
                      1. Can the new owner operating the purchased
                 place of business continue to operate under the old
                 owners license for the current year without the cur-
                 rent license being transferredon the Comptroller's
                 record prior to expiration.
                      2. Does the Comptrollerunder the Store Tax
                 Law have the authority to transfer a Store License
                 when presented after the expiration date of the
                 license.

                                        -2731-
Honorable Robert S. Calvert, Page 2   (M- 573)

     The Texas Supreme Court case referred to by you, Hurt et al.
v. Cooper et al., 130 Tex. 433, 110 S.W.2d 896 (1937), definitely
established that our original Chain Store Tax Law* as then com-
piled in Article lllld of Vernon's Annotated Penal Code of Texas,
was a constitutionallyvalid levy of occupationtaxes, although
denominated therein as license fees. The principle relied upon
by such Court to sustain this was their determinationthat the
primary purpose of the fees provided in such statute was raising
of revenue and not regulation.
     This occupationtax law, substantiallyunchanged, was
carried forward as Chapter 17, Title 122A, Taxation-General
V.C.S. in a rearrangementof certain of the taxation statutes
by the 56th Legislatureat its Third Called Session in 1959.
     Articles 17.01 - 17.06 of said Chapter 17 provide require-
ments for licenses; applicationsand fees for stores and mer-
cantile establishmentscoming within the purview of said Chapter,
but no provisiohs are set out for the transfer of a license from
the original licensee to a subsequent purchaser of the business.
Neverthelessthis particular transactionIs provided for in
Articles 7055 and 7056, of Vernon's Civil Statutes. Such statutes
are in par1 materia with the occupationtax law in question, and
they must be,construed with reference to each other. said Arti-
cles appear as follows:
         "Art. 7055. Any person, firm, corporation,
    or associationof persons, who shall be the
    legal owners or holders of any unexpired occu-
    pation license issued in accordance with the
    laws of this State, may transfer the same on
    the books of the officer by whom the same was
    issued. Acts 1885 p.27; G.L. vol. 9 p.647."
         “Art. 7056. The assignee or purchaser of
    such unexpired occupation license shall be author-
    ized to pursue such occupationunder such unexpired
    license for 'andduring the unexpired term thereof,
    provided that such assignee or purchaser shall,
    before following such occupation,comply in all
    other respects with the requirementsof the law
    provided for in the original applicationsfor such
    licenses. Nothing in this law shall be so construed
    as to authorize two or more persons, firms, corpora-
    tions or associationsof persons to follow the same
    occupation under one license at the same time. When-
    ever any person, firm, corporationor association

                       -2732-
,   .

        Honorable Robert S. Calvert, Page 3   (M- 573)

             of persons following an occupation shall be closed
             out by legal process, the occupationlicense shall
             be deemed an asset of said person, firm, corporation
             or associationof persons, and sold as other prop-
             erty belonging to said person, firm, corporation,or
             association;and the purchaser thereof shall have the
             right to pursue the occupation named in said license,
             or transfer it to any other person; provided, such
             occupation license shall under no circumstancesbe
             transferredmore than one time."
             A full compliancewith'the requirements of the law pro-
        vided for in the original applicationsfor such licenses,"
        as required of the purchaser or assignee by said Art. 7056,
        would seem to be reasonably satisfied by the purchaser or
        assignee of such unexpired license making an application
        or request to the Comptrollerfor a recognition of a valid
        transfer or assignment of such license, giving the Comptrol-
        ler the informationrequired by him to determine the identity
        and qualificationsof the new holder of the assigned license
        and the name and location of the business or businesses to be
        operated by such assignee. However, we fail to find any pro-
        visions of said statutes authorizing the Comptrollerto force
        the new owner to make such application or request, nor can we
        find any penalty specificallyprescribed for failing to make
        such application or request. It should be observed that the
        application or request by the new owner by purchase or asslgn-
        ment for transfer of an unexpired license is not the aoplication
        contemplatedor required by said Article 17.02 for the issuance
        of an original license. We are not authorized to enlarge the
        scope of said Article 17.02 so as to make it comprehend a request
        or applicationgrowing out of an assignment or transfer of an
        unexpired license. See Attorney General Opinion No. o-1673 (19391.
             On the particularpoint raised by your question No. 1,
        we find the holding in the early case of Faulkner et al v.
        Cassidy, 87 S.W. 904 (Tex.Civ.App.1905 err.ref.) to be strongly
        persuasive if not controlling. In this case the failure of a
        purchaser of an unexpired liquor license to have the transfer
        made on the books and to file an applicationdesignatingthe
        particular house in which he proposed to conduct his business,
        and to have such designationmade in the license, did not
        render his bona void. The statutes then in effect concerning
        the transfer of occupation licenses were identical in terminol-
        ogy with Articles 7055 and 7056. The Court stated in Its opinion
        that:
                  "The criterion by which the validity of the
             bona In such cases is to be determined seems to

                               -2733-
                                                                .   .

Honorable Robert S. Calvert, Page 4   (M- 573)

     be, would the license under which the liquor
     dealer sold protect him from a criminal pros-
     ecution for selling liquor without a license?"
     In holding the transferredlicense in question to be
valid in the face of non-compliancewith the statutes con-
cerning the transfer of such license, the recording of same
on the books of the officer by whom it was Issued and non-
compliance in other respects with the requirementsof the law
provided for ln the original applicationfor such license,
the Court, in Faulkner v. cassiay (supra) in effect, ruled
that such requirementsare merely directory and not of such
dignity or import as to vitiate the rights otherwise confer-
red by such statutes on the purchasers or assignees of such
unexpired licenses transferredfor the first time.
     In view of the foregoing, it is our opinion that the
cogent reasoning of such authority is applicable and decisive
of the matter posed in your first question, and such question
is thereby answered in the affirmative.
     All licenses issued to operate stores or mercantile
establishmentsin this State pursuant to said Chapter 17,
expire by the terms of Article 17.04 on the thirty-firstday
of December of each year, and on or before that date the holders
thereof are required to apply for renewal licenses for the next
ensuing calendar year. Any holder of such a license which was
assigned to him during the current year, who seeks to have such
license duly transferredon the Comptrollerlsrecords during
the time the law provided for him to seek a renewal thereof,
is entitled to such transfer, and the Comptrolleris authorized
to make the same on his records. Penalties are provided by
Article 17.04 if applicationsare made after such due date, or
not made at all, There is also prescribed in Article 17.09 of
said Chapter 17, Title 122A a criminal misdemeanorpenalty for
anyone operating such stores or mercantile establishmentswith-
out having displayed in a conspicuousplace in such store or
mercantile establishmentthe license fee receipt for the current
year.
     It is apparent from the foregoing that the Legislature
in enacting the provisions contained in said Articles 17.02 and
17.04 regarding fees and/or penalties for belated or omitted
original and renewal applications,had the purpose of collection
of revenue rather than regulatorymeasures foremost in mind, and
thereby gave the Comptrollerwide powers and authority in the
exercise of his duties to collect such taxes and civil penalties.

                      -2734-
.   .

        Honorable Robert S. Calvert, Page 5   (M-573)

        Unlike a strictly regulatory occupation tax, there are no
        express provisions in said Chapter 17, Title 122A, for the
        forfeiture of a license. On the contrary the entire thrust
        of the statutes seem to require the holding of a license by
        all who come within the purview of this law.
             In view of the clear mandate of the statutes in question
        to the Comptrollerto secure license fees from all such store
        operators, whether or snotapplication is made by such store
        operators, it reasonably would appear to follow that the Comp-
        troller, after collecting the fees and penalties, if any due,
        shall then issue renewal licenses to such store operators.
        This necessarily entails the recognizingand recording of a
        license transfer previously made by the original licensee to
        the present store operator, in order to issue a proper renewal
        license. This is so regardless of how late the application or
        request is made, or whether, in fact, it is made at all, but
        the Comptrolleris not empowered to waive the civil penalties
        accruing by virtue of the recalcitranceof such store operator.
        It may be pointed out here that the actual transfer of a right
        or privilege to conduct the business under the original current
        license necessarily occurs before the license expires. This
        is done by the seller at the time he assigns the license to the
        purchaser. It is only the recording of such previous transfer
        that remains to be done by the Comptroller. If the Comptroller
        determines that no such transfer occured, then he can issue only
        anyoriginal license to the applicant upon the payment of the pro-
        per fees. It is in this sense that we consider the matters in-
        volved in this second question.
             Therefore, your second question is also answered in the
        affirmative.

                 A person can purchase a business operated
            under an occupation license issued pursuant to
            Chapter 17 of Title 122A, Taxation-General,
            Vernon's Civil Statutes, and operate same until
            the license expires without such transfer being
            recorded in the Comptroller'srecords for the
            current year, provided such license is trans-
            ferred or assigned to the purchaser along with

                              -2735-
Honorable Robert S. Calvert, Page 6   (M-573)          _,. i

    the business; and the Comptrollerhas the author-
    ity to recognize and record such transfer in his
    records after the expiration of s*   license.
                                        s

                                            y General of Texas
Prepared by R. L. Lattlmore
Assistant Attorney General
APPROVED:
OPINION COMMITl'EE
Kerns Taylor‘,Chairman
W, &. Allen,-,-Acting
                   Co-Chairman
Steve Hollahan
Say Floyd
Charles Lind
cartml
     Lary
Meade F. Griffin
Staff Legal Assistant
Alfred Walker
Executive Assistant
Nola White
First Assistant Attorney General

                         -2736-