Court Opinion

ID: 4142432
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:21:52.966071+00
Date Added: 2024-06-11T09:20:41.294872
License: Public Domain

Honorable George I-I.
                    Sheppard
Comptroller of hblio Accounts
Austin, Texas

Dear Sir:                       Opinion No. O-3923
                                Rer Is the holder of a "oontraot oar-
                                     rier" permit, issued under the
                                     authority of the Railroad Commis-
                                     sion of Texas, subject to the oc-
                                     aupation tax on gross receipts
                                     levied by Article ?066b, Vernon's
                                     Texas Civil Statutes, despite the
                                     fact that suah grose reoeipts are
                                     derived exclusively from trens-
                                     porting property for hire or oom-
                                     pensation for the United 3tates
                                     Army, on shipments originating and
                                     terminating at srmy camps, posts,
                                     depots and sites but passing through
                                     two or more inaorporated cities,
                                     tomns or villages?

          Your letter of March 10, 1942 submits for our opinion the fol-
lowing question, which we quote therefrom;

          %rtiale XIV of House Bill No. 8 of the Forty-seventh
    Legislature provides for P quarterly gross receipts taxiof
    2.2% on~bcsiats earned by Contract Carriers and such Con-
    tra& Carrier being identified in Chapter 277, Acts of the
    Regular Session of the Forty-seaond Legislature.

         "This department has been holding that a Contract
   Carrier, operating under a permit from the Railroad Com-
   mission, rho makes hauls between one incorporated town
   and another incorporated town within this State is subject
   to the gross receipts tax.

          "I now have an inquiry from Spears, Taylor & Spears of
    San Antonio, Texas, copy of which I am enclosing, on behalf
    of one of their clients who hauls commodities for the United
    States Army. You will note they state that none of the mer-
    chandise bs picked up or delivered in inoorporated towns or
    cities, but it is my understanding that they may traverse
    through tmo or more inoorporated toaas to reaoh their destination.
          ",Ploesctell me if, in your opinion. the faot that
    the receipts are earned on hauls for the -UnitedStates
    :~reywould exempt them from payment of gross receipts tax
    es provided for in Article XIV of House Hill No. 6 of the
    Torty-seventh Legislature."

          You also attach copy of letter from Spsars, 'luylorend kjpoers,
Attorneys of Sen Antonio, l’exeS, pointing cut that the hauls made by
the contract carrier in question era not picked up or delivered in in-
corporated cities or towns but are exolusive~lyfor the IJnitedStates
Army, originating end terminating in army camps, depots, posts and sitos.
It is suggested therein that in view of such ciroumstances, said carrj,er
does not fall within the scope and purview of the taxing Aot.

          Article 7066b, Vernon's Texas Civil Statutes, levies the fol-
lowing ocoupetion tax upon the gross receipts of each "motor bus company,"
"motor carrier" or "contreat carrier:"

          "(a) Each individual, partnership, oompeny, assoc;ati,on,
    or corporet$on doing business as e 'motor bus company' es defined
    in Chapter 270, Acts Regular Session of the Fortieth Legislature,
    as amended by the Acts of 1929, First Called Session of the
    Forty-first Legislature, Chspter 78, or es 'motor c&wrier* or
    'contract carrier' es defined in Chapter 277, Acts Regular Session
    of the Forty-seoond Legislature, over end by use of the public
    highways of this State, shell make quarterly on the first day of
    January, April, July, and October of each year, a report to the
    Comptroller, under oath, of the individual, partnership, company,
    essocietion, or corporation by its president, treasurer, or
    secretary. showing the gross amount received from intrastate
    business done within this State in the payment of charges for
    transporting parsons for compensation and any freight or commodity
    for hire, or from other souroes of revenue reoeived from intre-
    state business within this Stats during the quarternext preoeding.
    Said individual, partnership, company, assoaietion, or corporation
    et the time of making said report, shall pay to the State Treasurer
    en oocupetion tax for the quarter beeinning on said date equal
    to two and two tenths (2.2) per cent of said gross receipts, as
    shown by said report. l'rovided,however, carriers of parsons or
    property who era required to pay an intangihlc assets tax under
    the laws of'this State, are here'byexempted from the'prcvisions
    of this Article of this Act."

          The above tax Act refers to Chapter 277, Ants, koeular Soss5.on.
42nd Legislature, Artj~cleSllb, Vernon's Texes i'ivil:itatutes,for tha
                                        .
cic?initionOf a "contreot .ccirrierensub-lootto the tax ttierebylcvied.

          ho quatc said definition from the stetuto edviscd to:

          "(h)   v)!e 282 U. S. 509) might have increased the
    cost to the government of the carriage of the mails did not
    impress the Court es militating against its validity."

          While the Dravc cese was decided by e divided court. its
authority cannot now be questioned, having .been recently cited with ep-
prove1 by the United States,Supreme Court in the opinion by Chief Justioe
Stone, announcing the unanimous decision of the court in Alabama v. Ring
~cncrable George H. Sheppard, page 5               o-3923

& Boozer, 86 L. Ed. 1, wherein a state sales tax of 2% upon building
materials wea susteined as applying to materials purchased by 8 con-*
tractor engaged inconstructing an army oamp for the United States
under 8. "cost-plus-a-fixed-fee" contract. We quote from the opinion
in the King & Boozer oese:

         "So far es such e nondiscriminatory state tax upon
   the contra&or enters into the cost of the meterials to
   the Government, that is but a normal incident of the
   organization within the same territory, of two indepen-
   dent taxing scveieignties. The asserted right of the one
   to be free of taxation by the other does not spell immunity
   from paying the edded costs. attributable to the taxation
   of those who furnish supplies to the Government end who
   have been granted no tax immunity. So far es a different
   view has proveiled, 444 Panhandle Oil Cc. v, lvIississippi
   (277 U. 5. 218) and Graves v. Texas Co. (298 IJ.S. 393).
   we think it no longer tenable."

          We think the question submitted by you is foreclosed by the P-
hove decisions and should accordingly be answered in the negative.

                                         Yours very truly

                                       ATTOR%Y   GN!XAL   OF TEXAS

                                          BY s/Pat M. Neff, Jr.
                                               Pat M. Keff, Jr.
                                                      Assistant

Pm:ej:ro

ADPROVEO APLlIL8, 1942
 s/Grover Sellera
FIRST ASSISTAN'
ATTORNEY GEWRAL

Approved Opinion Committee By B!"IB
                                  Chairman