Court Opinion

ID: 4135461
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:02:33.286094+00
Date Added: 2024-06-11T14:34:22.227949
License: Public Domain

December 28, 1962

Honorable Robert S. Calvert      Opinion No. WW-1517
Comptroller of Public Accounts
Austin, Texas                    Re:   Whether under the facts
                                       submitted, a corpora-
                                       tion chartered by an
                                       association of teachers
                                       should pay the franchise
                                       tax required by Chapter
                                       12, Title 122A, Taxation-
Dear Mr. Calvert:                      General, V.C.S.

       You have requested the opinion of this office concern-
ing the liability for payment of franchise tax of a corpora-
tion chartered by an association of teachers, Your request
included the purpose clause of this corporation, which is as
follows:

               "Section 1. To cooperate with the Texas
       State Teachers Association and the National
       Education Association in the promotion within
       the teaching group of the highest type of pro-
       fessional practices; to encourage active partici-
       pation of all teachers in the solution of school
       problems; to encourage every member to be a pro-
       gressive student of education; and to arouse
       allegiance to a genuine code of professional
       ethics.

              "Section 2. To encourage higher qualifi-
       cations for entrance into the teaching~profession;
       to guide well endowed young people to select
       teaching as a life,work; to improve the~social
       and economic,status of teachers; and to form a
       representative body able to speak with,authority
       for them.

              "Section 3. To promote, encourage and
       assist other local teacher organizations and to
       promote cooperation among such organizations and
       their members.
Honorable Robert S. Calvert, Page 2   (WW-1517)

             "Section 4. To cooperate with parent-
      teacher associations and other civic bodies
      having educational objectives and to aid in
      interpreting to the public the problems, the
      functions, and the steady progress of the
      public schools.

              "Section 5. To encourage teachers to
       exercise their rights and privileges as citizens
       and to accept willingly leadership in civic
       affairs."

       We understand from your request that this corporation
was organized under the Texas Non-Profit Corporation Act,
Chapter 9, Title 32, Vernon's Civil Statutes. There is no
provision exempting all such corporations from payment of
franchise tax.

       Article 12.01, Taxation-General  V.C.S., as amended
Acts 1961, 57th Leg., p. 182, ch. 97, 81, provides that:

              "(1) Except as herein provided, every
       domestic and foreign cornoration heretofzor
       hereafter chartered or authorized to do business
       in Texas or doing business in Texas, shall, on
       or before May 1st of each year, file such reports
       as are required by Article 12.08 and 12.19 and pay
       in advance to the Secretary of State a franchise
       tax for the year following. o ."

       Article 12.03, Taxation-General, V.C.S., lists a number
of exemptions from the franchise tax. Of the categories of
corporations qualifying for exemption, the closest to the
corporation in question are corporations organized for
          educational.purposes, or for purely public charity,"
"F-G=
( mp asis added.)

       Two fundamental principles,should be noted here. As
pointed out in Attorney General's Opinion No. O-4137, wherein
a question similar to the present one was discussed, "It is
too fundamental to require the citation of authorities that
one~claiming an exemptions from the payment of taxes must
clearly come within the exemptions.therefrom provided by the
law." The rule that in determining the~effect of a statute,
every word is presumed,to have a purpose and each word should
be given effect, was clearly stated in Eddins-Walcher Butane
co. V. Calvert, 156 Tex. 587, 298 S.W.2d 93 (1957).
Honorable Robert S. Calvert, Page 3      (ww-1517)

       Giving effect to the words "strictly" and "purely" as
used in Article 12.03, it is apparent from the above purpose
clause that the corporation in question will not come within
the exemptions set out in that Article.

       Section 1 of the purpose clause is clearly a professional
purpose, designed to improve the quality of the teaching pro-
fession. Section 2 is much the same, but provides for improv-
ing the "social and economic status of teachers" and for form-
ing "a representative body able to speak with authority for
them." These sections, together with Section 3, indicate a
purpose and function of the corporation not significantly
different from those of other professional and trade associa-
tions, i.e., to better the social and economic conditions of
their members.

       Section 4 is, by itself, more nearly an educational
purpose, and Section 5 suggests the encouragement of general
civil responsibility among teachers.

         While teachers are educators and are employed primarily
to educate, the purpose clause of the corporation considered
here reveals that the corporation itself was not organized for
%;~;C;;,    educational purposes, or for
          e corporation does not qualify
franchise tax.

                              SUMMARY

         Under the submitted facts, a corporation organized
         by an association of teachers, the purpose of which
         is neither strictly educational nor purely public
         charity, is not exempt from payment of the corpora-
         tion franchise tax.

                                   Yours very truly,

                                   WILL WILSON
                                   Attorney General of Texas

JAP:ca
                                   w-s  Assistant Attorniy &&era1
Honorable Robert S. Calvert, Page I, ww-1517)

APPROVED:

OPINION COMMITTEE
W. V. Geppert, Chairman
Norman Suarez
W. 0. Shultz
Cecil Rostch

REVIEWED FOR THE'ATTORNEY GENERAL
BY   Leonard Passmore