Court Opinion

ID: 4145649
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:59:13.536805+00
Date Added: 2024-06-11T14:37:41.221515
License: Public Domain

OFFICE OFTHEAnORNEY     GENERALOFTEXAS
                                        AUSTIN

-‘m     c. MANN
  *-”    .s*-

            Honorable PornL. Eaauahamp
            Gaoretary 0: State
            Austin,     Texas

            Dear sir:                    Attwition:

            in whfoh ym reqneat the
            tw rquowing iaots and
                                                        ona&h   10, 19s9,
                                                       a dommtio oharter

                                              **o&d     b;rthe rartgagor
                                              insWlments.     Iour letter

                                     ressntlng the amendaeno te
                                     r, the atfldatlt~aooonpanr-
                                    amendmnt reolte~sthat tu
                                .Twmrs fiotelOom@sny he8 title
                          to the aroreaald propdty, wh.io3.1pro;
                          pertp Is of the oash ~al.uaof @350,&30
                          over and above the flxet mmtgage loan
                          or #SEA5(0.00. This affidavft further
                          reoltie thst the $25O,OOQ valuationis
iIonorable
         Tom L. Beauchamp,Pa*- 2

         carried on the corporation'sbooks as
         ~150,000 to the capitol stq..ak a,ocount
         of 9100,000 credited to th'ii ln$etment
         account or ourplus of such oompany.
         This office required the paymente of
         a riling fee of $190 for filing the a-
         mendment to the charter, and in aadi-
         tion thereto required the payme t of
         rranohisetaxes oovering the peilad
         from May 4, 19259,through April Jo,
         19&O, based upon the capitol st6ok of.
          150,000 BL~ she rurther amount of
         1525.000 eP.
                    fhmoed by the note out-
         at&uU&+igalnat the corporate propsr-
         w- 'Theonly question whloh has
         arisen relates to our charge at this
         tlPurot thm addltlonal amount   ot tran-
         oblae tax baaed upon mtetemant,oontalnad
         In t&~ iimendmontto th, oharter uhloh
         wan $hie.day tiled.*
        The iollowlng questionsdareeubmlttsd for oar de-
termination:
              "1. Under the oimmwtanoei out-
         lined above Is the Ssorotary of State
         authorized to ~requlrathe oorporation
         to pay a supplemanta tranohlse tax
         ooverlna the rraotloaal wrtlen or the
         ~erfr~    May 4; 1939, t&rou~,Aprll
           .
              "2. In event the above question
         1s answered in the afflrmatlve,upon
         what portion of the oar oration's oapl-
         to1 assets of $575,000 7repreaentsd by
         Its authorized and paid In oapltol
         stook of 8150,000, its eurplus as stated
         in its oharter amendment of $100,000,
         and the amount of $325,000 represented
         by the remaining value of the property
         subdeot to the note ereoutsd by Ollff
         Tower8 Corporationin said amount of
         $925,000) are we entitled to use as a
         basis for determiningthe amount of tax
Xonorublu ToloL. Eesuchnmp, Page 3

          tiueby it?
               “3. In the event question number one
          is answered in the negative, and assuming
          there is no further ohange in the Zinanoial
          status o? the corporation'saapitol stock,
          then upoo what portion o? said $375,000
          should the tar due I&y 1, 1940, be based?"
          You lndlaate that the taxpayer has paid the tax
under protest as provided in Artlole 7057-b and the loonayis
being held in suspense awaiting the detsna%nationo? these
questlone.
          Artiole 7084, Revised Civil Statutes,   1925,   pro-
vldea in part as hollows:
               “(A) Fzoept as herrin provided, every
          domastio and foreign oorporationhereto?Ore
          or hereaiter ahartsred or orccanl%odto do
          business ii l'e

          roii0ang   . .
          Artlale 7086, Revised Cltll~Statutes,1925, pro-
vldee as iollowei
               nNhenaver a private domsstio oorpora-
          tion is ohartered in this state, . . .
          suah oorporatlon shall be cequliredto.pay
          in advanoe to the Seoretary o? State, as
          it8 rranohlse tax rmpl that tIma down to
          and inoludlng the 50th day o? April next
          rollo~ing, only suoh proportionatepart or
          Its annual iranohlse tax, as hereinabove
          prescribed, as the period o? tlaxebetween
          the date or its riling of its artloles of
          lnoorporation . . . and on the first day
          of May iollowing, bears to a oalendar year,"

          Artials 7089. Revised Civil Statutes, 1925, aon-
tains the ?ollowlng provisionsi
Honorable Tom LL Baauolmmp,Paga 4

              "Exxceptas heraln prodded, all oor-
         porations now required to pay an annual
         franchise tax shall, between January 1
         and ikroh $5 of each year, make a aworn
         report to the Seoreterp of State, on
         blanks furnishedby that oftloer, ehowlng
         the aozdltlon of such oorporatlonon the
         last day or its praoadingtiaoal year.
         The Seoretary Of State may iOr good oause
         shown by any oorporatlonsitend suoh tlzse
         to any date up to Mshp1 . . .*
          Artlole 7092 provides In part es follows:
              "The Seontary of State ahsll, durlag
         tha mnth 0r Uey or eaoh year, 00ti.ry eaoh,
         domastlo and ?oraIga aarporatlonwhloh smy
         be or baooma aubjaot to a ?ranOhlaa tax
         under any law of this stats, whloh has
         failed to pay auoh franohlsa tax an or ba-
         fore the rlrst day 0r my, that unleb~ suoh
         overdue tax tog&tharwith aaid penalty thera-
         O? shall be paid on or berora the first dq
         of July next followIng,'theright of atioh
         oorporatlonto do buslnaaa In this state
         will be torfaltadwithout judlolal aseer-
         talment~. :.-."
          The above atatutea olaarly establish that when Oli??
Towers Hotel Cornpangwas lnaorpomtod on Maroh lQ, 1939, lt-
we8 then due a rranohfse tax for the period from Maroh lo.,
1939, to April 30, 1939, on its oepitol atook and anoh tax
was dua upon the filing of its ohm-tar- The ~rranohlaetax
for the.yaar 1940 was due and payable on May 1st of 1939,
based upon its outstandingoapitol atoolc,surplus, eta,
prior to aEay1, 1939. The next franohiae tax due by tMs
oorporatlonwill be based upon Is outstanding oapltol atook,
surplus, eta., on the last day of Its risoal year next pra-
oedlng Msy 1, 1940, ani till be payable in advanoa on the
last me@loned date ror the franohiae tax year 194%;
          Although the oharter amendmentwas filed on Nay 4,
1939, during the franohlse tax year~l94.0,
                                         the rranohlw taxes
for suah year were already due and payable based upon the
iionorablcTom L. Beeuchamp,Tase 5

capitol structure prior to Xay 1st and the filing of the amend-
ment would not affect the rmount of tax due for that year.
          Prior to 1930, Artlole 7091)ii.C. S., 1925, provided
68 follov:s:
                 "In the event of increase in the author-
            ized capitol stook of any domestio or for-
            eign corporation, it shall also pay in ad-
            vance a supplemental franchise tax thereon
            for the remainder of the year down to and
            Inoludlngthe 3Qth day or April next there-
            after, the amount of whioh shall be doter-
            mined a.8ie provided In the third artlole OS
            this ohapter in oaae of the firat iraaohlse
            tax payment to be made by a domestic oorpo-
            ration whIoh may be hereafter authorized to
            do buainses nithln this state,"
          This statute wae repealed by Aots, lOSO, 4lrt Legls-
lature, 5th 0. S., page 220,
                         .   Ch. 68, Seo. 1.
          W-a hive been.unableto'rlnd any rurther atatutoa
authoriai+gthe oolleotion of a eupplementaltranohleetax.
upon filing a oharter amendment,and by the reppal of the a-
bove quoted statute it was evidently th8 intention ot the leg-
Icllaturethat :a mpplemental franchise tax ehould no longer
be paid under these olroumetanoea.
            We, therefore,,answeryour first queetlon in the
negative.
         Having anawered your first question In the negative,
your seoond question does not require an answer.
          As pointed out above tha iranohiae tax due on May 1,
194C, In advance for the year 1941 will be based upon the oor-
porate atruoture as of the last day of the flsoal year next pre-
oeding May 1, 1940. This being true its present oapltol attruo-
ture ~511 not in any way beocme a raotor in oaloulatfngthe
amunt of tax due for the year 1941 and your third questlon
may not materialize. We reoognlze that in submitting your
third question you might have also had in mind oorporatlone
similarly situated with reapeot to-this year's tax and a pre-
sent answer Is desired. If this is true we reepeotfully
lionorableTornL. B8aUChmp,   Page 0

request that you resubmit your third question and we shall be
glad to give it our further consideration.
                                           Yours very truly
                                      ATl!OE..YGEIERAL OF T%X&3

                                      BY
                                                      Aaalstant

cccrn

 APPRiX'liD~ 24, 1939

 ATTOBWBY .GliXItML
                  OF !mxAs