Court Opinion

ID: 4135082
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:58:10.006807+00
Date Added: 2024-06-11T14:07:17.543595
License: Public Domain

Dr. J. W. Edgar                        Opinion No. (Ci379)
Commissioner of Education
Texas Education Agency                 Re:   Whether The Classroom
Austin, Texas                                Teachers of Dallas, a
                                             non-profit corporation,
                                             is exempt from payment
                                             of franchise taxes under
Dear Dr. Edgar:                              stated facts.
     We quote In Its entirety your letter requesting the opinion
of this office on the above captioned question.
           "The Classroom Teachers of Dallas is incorporated
     as a non-profit membership organization under the laws
     of Texas  for the following purpose as stated in its
     charter:
               'The purpose for which The Classroom
          Teachers of Dallas is formed is strictly
          educational, to-wit: The advancement of
          public school education in Texas.'
     ItI am informed that the organization, in pursuit of
     the stated purpose, engage8 in the following activities:
          "1 . It publishes and distributes The Dallas Teacher,
     a periodical including columns designed to provide
     beneficial information and significant news to the
     teaching profession.
          “2 . It distributes to the teachers educational
     pamphlets and materials printed by the National Education
     Association and the Texas State Teachers Association.
          "3.  It organizes and assists in organizing Future
     Teachers of America Clubs in each high school and junior
     high school and participates extensively in the programs
     which are designed to provide information to future
     teachers.

                              -1799-
Dr. J.~W. Edgar, Page 2                Opinion No. (C- 379)

          “4 . It helps organize
                             -. Student
                                   .    .Education
                                          . .      .Associ-
     ations in colleges, supplies tnem witn eaucatlon
     materials and works with them in their programs which
     look toward teaching as a profession.
          “5 . It supplies speakers at local, district and
     state meetings of both Future Teachers of America and
     Student Education Associations.
          “6.  It provides speakers, programs and pamphlets
     encouraging all teachers to better qualify themselves
     professionally through indtvidual study along with
     recommending programs of indtvidual study.
          “7.  It cooperates in the programs of Texas State
     Teachers Association (TSTA), Texas Classroom Teachers
     Association (TCTA), National Education Association
      REA) and Teacher Education and Professional Standards
     tTEPS), which are designed to educate, inform and
     improve teachers and the teaching profession.
          “8.  It sends representatives to meetings of Texas
     State Teachers Association (TSTA), Texas Classroom
     Teachers Association (TCTA), National Education Associ-
     ation (NEA) and Teacher Education and Professional
     Standards (TEPS).
          "9. It sends representatives to the local Chamber
     of Commerce meetings upon request to exchange information.
          "10. It conducts an annual banquet for teachers and
     the public fin general, which is designed to impart infor-
     mation to the public and to provide closer cooperation
     between teachers and the public. At this year's banquet,
     the President of the National Education Association
     spoke on "Education for World Responsibility".
          "11. It encourages teachers to become members in
     professional teacher organizations.
          "12. It provides public information about the teach-
     ing profession.

                              -1800-
Dr. J. W. Edgar, Page 3            Opinion No. (C-379)

          "13. It polls members regarding their feeling as
     to the current status of professional competence,
     standards and ethics.
          "14. It provides a forum for discussion of problems
     involved in teaching.
          1115. It reports on all current programs at each
    meeting.
          "16. It works toward a program whereby teachers
     teach only in their fields of training or qualifications.
          "17. It interprets teacher education and professional
     standards to the teachers.
          "18. It encourages compliance with the Professional
     Code of Ethics.
         "lg. It provides business and professional leaders
    with information regarding the current status of education.
          "20. It provides speakers at meetings in each school
     on each part of the Professional Code of Ethics.
          "21. It provides an atmosphere conducive to the
     improvement of professional standards and mutual
     cooperation in the working out of teaching problems.
         "22. It works closely with local (Dallas) school
    officialsand administrators in determining programs,
    policies and discipline.
         "23. It cooperates extensively with the Assistant
    Superintendent of Schools in charge of In-Service
    Training in devising beneficial in-service training
    programs.for teachers.
          "24. It cooperates with local administration in
     the recruitment of prospective teachers.
          "25. It cooperates with local administration in
     the orientation of new teachers.

                             -1801-
Dr. J. W. Edgar, Page 4                  Opinion No. (C- 379)

          “26. It maintains a small scholarship fund, from
     which it grants small scholarships to worthy, but
     needy, students in and from the Dallas School System.
          “27. It maintains a small benevolent fund, from
     which it occasionally makes grants to any teacher in
     the Dallas system who is in need.
          “28.   As   a local
                           branch of each organization, it
     receives dues for (and remits such collections to ) its
     parent organizati,on,the Texas Classroom Teachers
     Association; the Texas State Teachers Association; and
     the National Education Association.
     "The activities above listed are those in which the
     organization customarily participates. It has on
     occasion sponsored a social activity for members; and it
     may on some occasions have paid expenses of some member
     or officer to attend some meeting not listed above, for
     discussion of matters of concern to the schools of Texas.
     For your Information, there is attached hereto copy of
     an audit of all receipts, and expenditures of the organ-
     ization for the year 1961, which further illustrates its
     activities.
     "you are requested to advise whether a corporation which
     is organized for the purpose above stated and engages in
     the activities above enumerated is required to pay a
     franchise tax under the laws of Texas, and particularly
     Arts. 12.01 and 12.03 'Taxation-General', Vernon's Civil
     Statutes as amended.
     "In connection with this request, I would add that in
     my opinion the activities enumerated above are designed
     to further and do further the program of public education
     in this State. So far as I can see, it has no other
     purpose. If any individual or class of individuals
     benefits from the activities of the organization, other
     than as the general public benefits, it is in an indirect
     way. That is, the encouragement of teachers to improve
     themselves in their teaching abilities and citizenship
     responsibilities, and assisting with local school programs
     of in-service training may result ultimately in higher
     salaries for the teachers who are improved by such programs.
     But that is an incidental result (assuming it occurs) of
     acitivities designed to give better teaching in the public
     schools.

                                -1802-
Dr. J. W. Edgar, Page 5                      Opinion No. (C- 379)

          'At all events, the cooperative endeavors of
     teacher-organizations such as The Classroom Teachers
     of Dallas have been an integral, if not indispensible,
     part of the progress made in furnishing better
     training of our youth in the schools of Texas.
           "In a sense, the question is whether such organ-
     izations are to be charged for the,privilege of
     making this important contribution to the public
     good.
     Article 12.03, Taxation-General, Vernon's Civil Statutes,
enumerates the allowable exemptions from franchise taxes. Among
those exempt are corporations organized for 'strictly educational
purposes. . . ."
     In Attorney General Opinion No. WW-1517 (1962), this office
held that under the submitted facts a corporation chartered by an
association of teachers was required to pay franchise taxes. The
purpose clause of the charter of the corporation contained de-
tailed authorizations or stated purposes which in most respects,
would embrace the activities carried on by The Classroom Teachers
of Dallas. However, one of the charter purposes was ". . .to
improve the social and economic status of teachers; and to form
a representative body able to speak with authority for them."
We agree with the holding of Opinion No. WW-1517 that this part
of the purpose,,clauseis inconsistent with being a coqoration
organized for . . .strictly educational purposes. . . , and affirm
it for this reason.
     We are not'in accord with that portion of the Opinion which con-
cludes that the following purposes are not "strictly educational":
(1) cooperation with the Texas State Teachers Association and the
National Education Association in the promotion within the teaching
group of the highest type of professional practices; (2) the en-
couragement of active participation of all teachers in the solution
of school problems (3) the encoura ement of members to be pro-
gressive students of education; (47 the arousing of allegiance to a
genuine code of professional ethics; (5) the encouragement of higher
qualifications for entrance into the teaching profession; (6) the
guidance of well endowed young people to select teaching as a life
work; (7) the promotion, encouragement and assistance of other local
teacher organizations; and (8) the promotion of cooperation among
such organizations and their members.
     The charter of The Classxoom Teachers of Dallas states that It
is formed for a strictly educational purpose, to wit: "The advance-
ment of public school education in Texas." We agree with your ,vlew

                            -J.803-
.I    .

                                                                         _-

     Dr. J. W. Edgar, Page 6                  Opinion No. (C-379)

     that the activities in which the corporation engages are
     consistent with its stated purpose and are designed for the
     furtherance thereof. Any salary benefits which may accrue
     to teachers as a result of the conduct of these activities
     is purely incidental thereto and in no way affects or negates
     the strictly educational purpose for which the corporation was
     organized. You are, therefore, advised that under the sub-
     mitted facts The Classroom Teachers of Dallas is exempt from
     franchise taxes.
                               SUMMARY
                               -------
               Under submitted facts, The Classroom Teachers
          of Dallas, a non-profit corporation organized for
          a strictly educational purpose and limited by its
          charter to the advancement of public school education
          in Texas, is exempt from payment of franchise taxes.
                                             Yours very truly,
                                             WAGGONER CARR
                                             Attorney General of Texas

     MMcGP:sjl
     APPROVED:
     OPINION COMMITTEE
     W. V. Geppert, Chairman
     Gordon C. Cass
     Cecil C. Rotsch
     Arthur Sandlin
     W. 0. Shultz
     APPROVED FOR THE ATTORNEY GENERAL
     BY: Stanton Stone

                                    -1804-