Court Opinion

ID: 4143453
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:33:52.33003+00
Date Added: 2024-06-11T13:13:12.259446
License: Public Domain

546

       OFFICE OF THE ATTORNEY GENERAL OF ‘TEXAS
                              AUSTIN

Hon. M. 0. Plo.omrE
aaoratary   of at6t-a
Austin,   Tezar
Dear   Ylr I           Attant lent       Mr.

                                                              emit   whloll
                                                                subatantle                        llr
                                               rmttcln rrqtiina
                                               4 un4w Artlola
                                                0 reaoraal O?
                                                oa to bo olosr4
                                               dbtdJ      F--d-
                                          1, an6 fron aoh arfl-
                                        lta r ntia an4 rocrlhrt
                                     lnnehlr*   tsix au. nq     1;                                                                        i
                                   rrrotra    qu6etlonr.
                          roaolpt  or your lettar                                  or Mavrbar
                         you submit tha following                                   qaeatioaa
                         lor an opihion:
                        the 8eoretery           of Statr                      author-
                  cupowsred to     cot         tin&r            Artialr
        &~EI and require         a beginnrr eorporatlon    to
        file   an afficiatit,     p~hlab would pror&ddr nub-
        6tsntiallp     the lxam information      n'ulma    to
        be coapllei4 undw Article          7089, 6n % amu*
        the   rrcom3s of eueh oorpemtlon         to be ale6e4
        at8 detr inanramel8-          prroeding  May 1, mn4
        frtm mioh atfida*it datermine and aollrst
        th6 ?r6nahir*       ti8X duo xes l?

                                         ---    .---^..---”       -..-   .-    ^_..C   “i-Y-l.l         .,D   .TsoaI   1-m*.-....
                                                                           547

Hon. M. 0. Flower-a,        pafle 2

            (2)    If the answer of tha above qusa-
      tlon Is Tua-,      should the demand upon tba
      corporation    requlra   tha books to br closed
      on R definite     data, or upon an lud~flnlto
      data to br daterained       by thr oorporatlon
      from a standpoint      of oanrenl*nar   end 88
      mar to May 1 es poniblr,         whloh would
      anablo thapi to filr     the repar t and pay thr
      tama on that date3

               (3) Ii     tha   rooorda     are   to   be closed
      at CLfixed time,          what data     should    be the
      0loalng   time?
             (L) If it ban km deold.4         that we
      do  have tlxla authority,    would this Depart-
      sent havr the further     authorltl   to audit
      ell beck irunohiar     tax aooounta and ro-
      aaaaaa franehlao    tams,   or would tbr state
      ba estopped by this prior drpartaantal
      praotlcr?
             Artlola      7084,   Ravlrd    Civil      Statutaa,   1925,
as amnaod,       reads in part      as follouar

             *Lxorpt am heNin     provided,   arrry
      domuatlo  end forrltp     oorporetlonhereta-
      rora or heraaftar     ohartrrrd   or authorized
      to 40 bualnoaa In Toxaa, shall,        on or br-
      rorr May 1st oi oasoQ par,       pay in advance
      to the Saemtary     of State a rNnQhl88
      tax for the yaar following,       bared upon
      that proportion   of the outatandlng       oapitel
      stook,     . . .”

            Article       7086,   Revised     Civil    Statutoa,   1925,
provldoa   In part:
             Whenaver a private       dolpsatia  clorpora-
      tlon la chartrmd       5.n this Stat.,    . . . such
      corporetlon    shall   ba repulsed to pay in
      advanor to the Seoretary of Btato,          as Its
      tranch~ae   tax rrcin that tlaw doom to and
      inol~dlllg  the thlrti(lth     day of April next
      iollowln~,   only such prOpottlOnata          pnrt
                                                                               548

    Eon, M. 0.      Wmara,     pafw 3

           Of its    6~~1   ?ranUhIaa tax,    as trrainabova
           pnaorlbad,    aa the period OS tim       baswaan
           the aat0 of ?lling     of its artIcl88    of in-
           oorporatlon   or tha lssuanoo    OS its grrmlt
           to do bualneos,     as the aese oay be, and
           on the firat    day of Alay ?ollouin&,    boars
           to a aalrndsr    par.”

                Artiols      7087,   Rsylaad   Civil   Statutes,       1925,
    ma48    08 Tollowar
                 “To dcGomine         tb    amount or the flrat
           franohhiae tax pamnt            raquirad b thla
           ohaptrr of any dcuaati~ aorporat I 011whloh
           MJ ba braetter         ohartered,        or OS any SOT-
           a&n oorporstlon        whleb my hsraaitar         apply
           ror a perrrlt to do buatlnaaa within thla
           Stab,    end also     to drkrdae          tb aorrrst-
           maa 0r any rrport *hIoh 18 provided Sor
           In this ohaptrr,       tha Edoratary of Btata
           mar, whwvrr        he daraa It neao8aary or
           pro-r    to protab3t th8 intweet*            o? th
           St&+, rrqulrr       any on0 or Q0rs of the of-
           floors or such oorgoratlona              to mLJ aPd
           fllr   in the o??loa or the Saontazy             of
           State   an ~r?ld~ylt       setting     Sorth Sully thr
           rocto oonowninc, the mount of ths aurplua
           am3 utilirldrd     prallts,      roapaotlval~,     l?
           any, OS such dolvatla           or foraign aorpora-
           tloon; and until      tha Gaoratary of State ahall
           bo rull~    astia?lrd      ae to thr amount OS aaah
           aurplua end undlvldrd           protlta,    rag ootlvelr,
           l? any, he shall ntt Slle thr artlolaa of
           lnoorporatlon      OS auoh pmpoaad 4omaatlo
           oorpratlon,       or issue      such peralt,    or aa-
           aapt such Sranohlae tax.*
              Art1610        7089,   Reviaad   01~11 Eltatutee,        1925,
    reeds as rollowar

i
                                                                     549

Hon. U. 0.    Flowms,     peer 4

              wEccept as hsrrir, ~mvldad,       a11 cor-
       2oratlms     now required to pay an annual
       frenchles    tax shall.   between January lot
       erd i&ml; 15th of aaah yoer, m&e a aworn
       roport to the 8aomtary        of 8tata.   on
       blnnka fumlrhod      by that officer,     mowing
       the oondltlon     of suoh corporation     on th
       lart day of ita preoading flcloal        year. . .I
       (Tha atatuto    here mkrs tsrlous       provl111onn
       QGnaOruiug tha oxrtant8       8nd fill&3   Of  fhr
       report,   ana  other mtterr.)
            Artlalr ?W?9a, F%~vlmd Civil 6tatute8,
Aots   1930, 4lat La&lslaturr, 5th Called 68rslon, p&go
220,   Chapter 66, R~otlon 4, read8 aa followat
              'The f'orprs prrrarlbad shall    eoataln
       other information a8 the Baoratary or Stat0
       may drain adtlrabls     end ha ma,r adopt rulem
       and ragul9tlons     prorldi~     for the anrome-
       mnt    of the pmvlslo~       hrroof sod may ro-
       qulrs cor~orstlona      to mum auoh moor66
       MI say be naorrssry      In dotrrinlnlng tha
       aaonnt cf taxaa that may k dua herrundsr.
       No tar shell    be paid Wloh my not be col-
       ;;;IM;~ andar tha Stats atId Fadwe         Conotl-
               .”
           Your lettrr  dlsoum~            the   eboro   quaetlona
end atcatuks  contlrmek as lollowt
               ‘For t&r purposes of thti opInlon
       oonslder a corporation           formed between
       January 1 and May 1.           Artldrm 7086 and
       ‘Jo137presarlba       the proowkm        to b8 Ml-
       10~~~3 in asorrtainlng         the correot      aaount
       of tax     due rrtxu data ot inoorgoration           to
       nay 1.      Article     7089  raqulrrr    all   ompor+
       tlons to file        betwarn Jen~r~        1 and bieroh
       15 or wioh year         (whioh tlms my ba ertrod*d
       to %ay 1) Q rranohlse           tmx report showin% the
       candltlcn        or suah oorpomtion        on the l~Jt
       day or lta praosding          flecal    yeer.    Cbviaun-
       ly tl corporation        fx:aorpomted      during th*
       tima under oonsldsretlon             has not had suf-
       ficient      tirns prior to Malay1 to oo@5t*            a
       risoal     year.     Artlc.l.8 7087, on tha othar
                                                                  550

Bon. M. 0. Fl08ar8,     pa&a 5

     hand, maraly prasorlb88       tie pmeadura to
     ba fOllowa     in d8tarmlning    tha tax rrom
     data bf lnoorporatlcm      down so May 1, and
     maker no mantlon ai tie method to ba fol-
     lowad in aaeartaln*        the tax due on May 1.
     Art1018 7089a ~rorldaa      that the horatr~y
     or Stata   say edapt rule8 ma ragulatlon8
     prorl4lng for the anl’erorm8nt of the pro-
     vision8   oi Art1018 7089, and amy raqulr8
     oorporatlona    to 0~88 ~ruoh record8 81 m8y
     b8 naoa88ary    la data~lnleg     the amount or
     taxer that nay be dur under Artlola        7084.
            ‘?A8 8n illurtr8tfon        of tin problem
     OOUiZW&ing thil 0ffiOa ~8 sita th                 ~!88a Oi
     a oorpor8tlon      lnoorpor8trd      February 9, 1938,
     with a oapltal      of $209 000.00,        who88 trxeblr
     oapital    ~88 lnoraaaa4 ~~3.,000.00            two~daJr8
     th8raaftar.      Traqusatl~,       oorporetlon8     8rc4
     araatad for the purpoos          o? borrowlag      sonar
     to prwen$ lndlvlduetl         liablliQy. 0n the oth8r
     hrnd, tha eorporatlon         sight    luoraara    (T de-
     oraaaa I t8 aapltsl       ltook, or be eonrayed a
     t-8     uD0m 0r 88m8           *iah     would ozuati
     a larea rurplus bat-an           the data o? lneorpora-
     tlon and the followfail        May 1.
           "It ha8 bean a oonattant    praotloa bi
     thia otrloa for the Charter    Mvision   to a@-
     oartmin tba amount or tar &a at tha time      of
     lnaorpontlon,    and also 8Urin   the asrpon-
     tlon of tha mount of tax &a on H8r 1 follow-
     lng the data of inoorporatlon,barrd upon
     the taxable   011plb1 dlsolosrd by the @hertar.
           "While th5a la @ia ouatomary and moat
     lxpsdiantmcsthod   ofhandllaQ      the a8tt8r,th
     writer 18 umbla    to rm     any 8Qatutory rwthor-
     lzation ior the oomputation of thr franshin
     tax due on May 1, in this (Banner, n&W18 thare
     any spaolflo  8tatnterp    authotizatlon     for the
     acmpll~tlon  or this tar by 81~ othar mam8,
     other then tha ponafbla iapliQatiOn        Of Artlola
     7069a. *
                                                                                                 551

Hon. Y. 0. Flusara, page 6

              The       AttotmJ Oanarti                ‘8   opinion    to whlnh you
refer, addra8aad to Hoa. W. W. Eaath,                               tlatadOetobrr 18,
1934, nrkar the Sollouing rulkpgo:
            *       it 18 th8 O@liOE  Of tbr WrikX
     that 8ia'a&81 X8pOl-tto ba SIM4 b tW8m
     Jaauarf lrt and Marohl$$h should rbaw tb
     oonditim    of a oorporstiem oa tbr hat day
     of 1 ta pnardiag    flMa1  yasf prior So $Sn-
     wary 1st.            . . .
              I)               It
                           0pin10n    18 th
                                      or                            Oh8 altar
     that b;S&; a ~omortio   eorpvmtloa                                   fr   rrq~irrd
     to Slla what ~001p
                      term a rawlar                                report       and
     8ufSargaaaltla8 tha:aree for railmu to
     rile said report, itaut   have brd a vomplatr
     sir081 ear priar to the tima   la ahlob It Ir :'
     raquka 3; to f&la its annul rcrprt.   ti otbr
     *ordO,        it     EUUt       h8~8     hf4d 8    ~O!@pl@tS      ?bOdl
     year     prior to fabuary 100..
          ". . . X will statr Ub   if a dOluSti0
     corporationhas had a @oil ate f%a81~ yam?
     prior to JaaMxy lst, it     SOQU$T86  to s&l*
     it8 8nntl81rrporo b.twraa~Yalmar~ let an4
     X8rohlJth,andtbr                         fraaohla8 tarIP8tai
     neo888ity  ba baro&kp. 8&a  NpOd.                                         on     th8
     othar hand, ii the"-tror#Wat~on
                                   I8 not                                      liabla
     r0r the ririira of an annrul report, rlnor
     it hnd 11~ ii8Oa~ Ptr,, tbm tOP SUPt OOIP-
     pat8 the t132sxos the n~ooxar Ln pur 0rf-m                                             .'
     relating to SU8h OQrpVa%irJa, ~888   YOU
     deem other InSormtIon moa8sary to datarm&
     the amunt of tax that m)r br OU@.  In 8aeh
     avant you m8y raqulrr 8n Sfs~uEVit,ex ur
     xaquira            ruoh        oorporatlonto            aura,8aah          m-
     cords ar you dora aaoa8aa~                              In datermlnlqg
     the amount of tax t&at rry                             ba   dU8. *
Han. Ii. 0. 7low~rr, pa&. 7

                     Tha faot         that   8 beglnnrr       oorporatlon         nr
lnomasa   its taxable  capita1 and.2 ArtIola   7064, b-
tveerl the date of IaoorporatIon  ena xaf 1st without
atioh increasei bakq tarrble under your baparwental
prsatlaa a006 aot plea43 it In 6 dlffor8nt    porlaio~l
from an older oorpomtion whI0h Iaorra8rs      It8 oapltal
on Ma7 2nd or brtursn its pneoding     flroal  0108lng
11x3 Ma7 lat.             Opinion          lrlo. o-764.
                     We l&ma          with 7our oonolwio~          that the rrtatutem
do net mike datlnlta                      provloIon for       tkn proordurr to k
miOW8a          133 08O~Tti~~g                t&0   MOtUIt      Of    08X   i%M   its     8d~811418
on the bfa7 lot next w0t3*0aiag tbr iaoorpomtIon or l k-
glnmr aorporetlon. Thi8    kilt% trtra, th6  lO= $Og;.'i;hd
WI4 00moIobmt 00LutTu0t10aeul pre0tIor      of
mat,   whloh you alao 8teta                     la thr m8t 8~~6 r@ on’;,&                       th#-
lamgae6gr ot tbr ootut in                       a* 1, ALtl8l¶tI9 PIN                               L
(Tar.       Clr. App.,  1939, *    reihmd), 134 8 a                                t2aj
322,       'mo)f WWMfOM    booonm 8 bO%Omini~~(& &O&r.                                    J8-
BeOiall7        i8     tb18        t?U*  ra&?~tdili&     rOVOnU.uI     *OaOltr@8,         the
lbmin~tzation                 of    whlob ,&a (Lll&8r      eoa8turt       ob8an~tioa
Of     tO0   10&i818ttlSS.w

                                                             Youra var7traly

                                                     ATTORSBY
                                                            OtlilWRAL01 TUXA8