Court Opinion

ID: 4134091
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:45:53.308213+00
Date Added: 2024-06-11T14:34:20.310317
License: Public Domain

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      Honorable Robert S. Calvert        Opinion
      Comntroller of Public Accounts
      Capitol Station                    RE:   Whether a foreign
      Austin, Texas                            co-operative mar-
                                               keting association
                                               incorporated in a
                                               fo'reignstate is re-
                                                uired to deposit
                                                500 as required by
                                               st
                                               Article 12.03, Title
                                               122A, Taxation-Gen-
                                               eral, V.C.S., and if
                                               a sum so paid can be
                                               refunded by the Comp-
      Dear Mr. Calvert:                        troller
           By your recent letter, you request our opinion as to
      whether Article 12.06, Title 122A, Taxation-General, Ver-
      non's Civil Statutes (as amended by Acts 1969, 61st Leg.
      Ch. 801, p. 2366), requires that $500.00 be deposited by a
      foreign cooperative marketing association licensed'to trans-
      act business in this State, and if so paid, doiyou have the
      authority to refund the same?
           Agricultural co-operative marketing associations are
      governed by the provisions of Articles 5737-5750, inclu-
      sive, Vernon's Civil Statutes, and foreign co-operative
      marketing associations are permitted to transact business
      in this State by the express provisions of Article 5763,
      supra, which provides as follows:
                "The provision6 of the general corporation
           laws of this State, and all powers and rights'there-
           under shall apply to associations organized here-
           under extent when in conflict wlth the nrovisions
           of this chapter. Provided, however, that an co-
           operative marketing association incor*r
                                                 ora e
           the laws of any other State may apply for and be
           granted a permit to do business in this State end
           pay the same filing fee as required of domestic
           corporations oSganized for a similar purpose.
           Provided. further. that such foreian coonerative
           marketing associations shall not be required to have
           a paid-up capital or sny portion of the capital paid-up
                                -2747-
.   .                                                               .

    Honorable Robert S. Calvert,   page 2 (M- 579

         in order to be entitled to such permit".   (Rm-
         phasis added.)
         Article 5764, supra, dealing with marketing associa-
    tions organized under Chapter 8, Title 93, Vernon's Civil
    Statutes, requires an annual license fee of ten dollars,
    a filing fee of ten dollars, and two dollars and fifty
    cents for any amendments to their charter, and further
    provides that such associations shall be exempt ,fromall
    franchise or license taxes. Under Article 12.01 et seq,
    Title 122a,~Taxation-General, a foreign corporation quali-
    fying for business in Texas Is liable only for franchise
    taxes in the same manner and on the same basis as a domes-
    2;; corporation. 14 Tex.Jur.2d 761, Corporations, Sec.
          To require a foreign marketing association to pay
    franchise taxes when a domestic marketing association is
    exempt from franchise tax would be a violation of our
    Federal and State Constitutions. U. S. Constitution,
    Fourteenth Amendment, Section I; Article VIII, Section
    2, Texas Constitution. The foreign marketing association
    which is the subject of your inquiry has apparently al-
    ready obtained a permit to do business and otherwise com-
    plied with all state regulations governing the trsnsac-
    tion of business within the State. Under these facts,
    the imposition of a franchise tax upon such foreign cor-
    porations alone and exemption of all such domestic cor-
    porations would be discriminatory and unconstitutional.
    Southern R. Co. v. Green, 216 u.;S.400 (1909); 77 A.L.R.
1494; 14 Tex.Jur.2d 667, Corporations, Sec. 574.
         From,the above statutory provisions, and our inter-
    pretation thereof, a foreign co-operative marketing asso-
    ciation whose charter and permit provisions meet the re-
    quirements of Articles 5737-5764 need only show its
    articles of incorporation in a foreign state, pay the
    required fees as set forth in Article 5764, and secure
    a permit from the Secretary of State in order to be
    authorized to do business in Texas; subject only to the
    provisions of Article 12.06,  supra, if they are applicable.
         Article 12.06   of said Title 122A, as amended, provides
    as follows:
              "All foreign corporations applying for a cer-
         tificate of authority to do business, shall at the
         time of filing its application deposit with the
         Comptroller of Public Accounts the sum of Five
         Hundred Dollars ($500) which sum shall be deposi-
         ted in a trust fund to be held by the Comptroller

                                -2748-
.   .

        Honorable Robert Si Calvert, page 3 (M-576)

            of Public Accounts during the time the foreign
            corporation is engaged in doing business in this
            State. This deposit shall insure a foreign cor-
            poration's payment of all filing fees, filing
            all franchise tax reports and payment of fran-
            chise taxes, penalties and interest due this
            State according to the provisions of this Chap-
            ter. In the event a foreign corporation has
            ceased doing business in Texas prior to the
            forfeiture of the corporationts Certificate
            of Authority, and can demonstrate that all
            franchise tax reports, franchise taxes and
            penalties have been filed and paid, such de-
            posit or balance thereof, if any, shall be
            returned by the Comptroller of Public Accounts
            to the legal agent of such foreign corporation
            in this State, designated in conformity with
            Article 12.11 of this Chapter.
                  "Whenever a corporation's Certificate of
             Authority to do business in this State be for-
             feited as provided in this Chapter, the entire
             amount of said deposit shall likewise be for-
             feited.
                   "The forfeiture of said deposit shall not
             bar the State's full recovery of the amount of
             franchise tax due; however, upon proof by such
             corporation of the actual amount of such fran-
             chise taxes due, and upon the filing of all
             delinquent tax reports, any amount of said
             deposit in excess of such franchise tax, in-
             cluding penalty and:interest, shall be refun-
             ded."
             The language of the statute clearly shows that the
        condition of such deposit is the'payment of all fees
        and/or franchise taxes to become due and owing under said
        Chapter to the State by the foreign corporation seeking
        authorization to do business in this State.
             It seems logical that if the corporation seeking
        admittance to this State is exempt from franchise taxes
        by statute, or exempt from the payment of franchise taxes
        by the proper statutory construction of the pertinent
        statutes and the Federal and State Constitutions, and
        that the necessary filing and license fees were paid at
        the time of filing, that such corporation would not be
        required to deposit the $500.00 as set forth in Section

                                   -274g-
Honorable Robert S. Calvert, page 4 (M-576)

2 of Article 12.06, supra.
     Having paid Five Hundred Dollars under protest, we are
of the opinion that~the reasoning set forth in the case of
Austin National Bank v. Sheppard, 123 Tex. 272, 71 S.W.2d
242 (1934), constitutes sufficient basis for the Comptroller
to refund the Five Hundred Dollars under question. (See
page 246 of the case.)
     In addition to the above authority, Article 1.1l.Aof
said Title 122A empowers the Comptroller to refund certain
taxes and licenses therein enumerated upon determination
that any person, firm or corporation has through mistake
of law or fact overpaid the amount due the State. This
office has heretofore in its Opinion No. M-140, dated
October 2, 1967, reiterated the reasoning set forth In
the Austin National Bank opinion.
     In view of the foregoing and to the extent of any
conflict with this opinion, the holding in former Attor-
ney General Opinion O-6045 (1944) that such a kind of
agricultural marketing association as is under considera-
tion in this present opinion is not exempt from the
franchise tax is overruled. We have held (supra) that
Article 5764 should be given an interpretation which
would uphold rather than void it on the constitutional
grounds above considered.
                      SUMMARY
              A foreign co-operative marketing
         ;;I;Elation, incorporated in a foreign
                whose charter provisions meet the
         requiiements of Articles 5737-5764, Ver-
         non's Civil Statutes, is not required to
         deposit the Five Hundred Dollars as set
         forth in Article 12.06, Title 122A, Taxa-
         tion-General, Vernon's Civil Statutes,
         as a condition to secure a permit to do
         business in Texas, and a sum so paid

                         -2750-
.   ._-

          Honorable Robert S. Calvert, page 5 (M-576)

                      under protest to acquire a permit to do
                      business in this State may be refunded
                      by the Corntroller. Attorney General
                                 045 (1944) is overruled to
                      Opinion 0-if
                      the extent of any conflict with this
                      opinion.

                                                   neral of Texas

          Prepared by Gordon C. Cass
          Assistant Attorney General
          APPROVED:
          OPINION COMMITTEE
          Kerns Taylor, Chairman
          W. E. Allen, Acting Co-Chairman
          Jim Broadhurst
          Robert Davis
          Sally Phillips
          Ed Esquivel
          ~MEADE F. GRIFFIN
           Staff Legal Assistsnt
          ALF'RED WALKER
          Executive Assistant
          NOL4 WHITE
          First Assistant

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