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WlEL WILfsON
A-l-roRNEY CazNERAL August 21, 195%
Honorable Burney Walker. Opinion No. WW-687
Criminal District Attorney
McLennan County Re: Proper method of taxing
Waco, Texas bank stock under sub-
mitted facts.
Dear Mr. Walker:
You have requested,that we ad.viseyou on the
following question:
*If a national bank does not include the
market value of its real estate In ascertaining
the value of the assets of said bank for pur-
poses of the annual statement of assets, should
they be allowed to deduct the assessed value of
said real estate from the assets when arriving
at the value of the bank stock for determining
tax liabllity~?"
In City of Abilene v/Meek, 311 S.W.2d 654 (Tex.Clv.
App. 1958, .error.ref: ,;the court wasconcerned with the
meaning of Article 71 6, Vernonl~sCivil Statutes, which reads
In part as:follows:
"Every banking corporation, State or national,
doing business In this State shall, in the city
or town in which it Is located, render its real
estate to the tax assessor at the time and In the
manner requlred~of individuals. At the time of
making such rendition the .presldent or some other
officer of said bank shall file with said asses-
sor a sworn statement showing the number and
amount of the shares of said bank, the name and
resld,enceof each shareholder, and the number and
amount of shares owned by him. Every shareholder
of said bank shall, In the city or town where
said bank is located, render at their actual value
to the tax assessor all ahares owned by him in
Such bank; and in case of his failure so to do,
the assessor shall assess such unrendered shares
as other unrendered property. Each share In such
bank shall be taxed only for the difference be-
tween Its actual cash value and the proportionate
amount per snare at which its real estate 1s
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Honorable EUrney Walker, Page 2 (OpiMon 30. WW687)
assessed. Nothing herein shall
be so const&& ‘as to tax national or State
banks, or the Ehareholders thereof, at a
greater rate than is assessed against other
moneyed capital In the hands of individuals.”
(Emphasls supplied.)
The court stated,that the statute was plain and
unambiguous and that each share should be taxed only,for the
difference between Its actual cash value and the proportion-
ate amount per share at which Its real estate was assessed.
In determining the value of the real estate, the city was
required to accept its own assessed value thereof rather than
the value as shown in the statement of the condition of the
bank filed with the Comptroller.
In Opinion No. WW-439. this office held that In
determining the value of bank stock the assessment should be
based upon the fair cash market value of the stock rather
than the value that would be obtained by adding the value of
the capital stock, t~heamount of surplus, undivided profits
or reserve funds and dividing this by the number of shares
of stock. Articles 7149 and 7174, V.C.S., deal with ,valua-
tion and read, respectively, in part as follows:
. . . .,
” 1Value. I--the:,term,‘true and full value,’
wherever ,’used shall be held to mean the fair
market value, in cash, at the place where the
property to which the term is applied shall
be at the time of assessment, being the price
which could be obtained therefor at private
sale, and not at forced or auction sale.”
1,. . .
“In determining the true and full value of real
and personal property the assessor shall not
ad,opta lower or different standard of value
because the same is to serve is a basis of tax-
ation, nor shall he adopt as a criterion of
value the price for which such property would
sell at auction or a forced sale or in the ag-
gregate with all the property,In his county; but
he shall value each tract or lot by Itself, and
at such sum and price as he believes the same to
be fairly worth in money at the time such assess-
ment Is made.”
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Honorable Gurney Walker, Page 3 (Opinion No. ~~-687)
It has been held that there is no substantial
difference in the terms (1) market value, (2) fair market
value, (3) cash market value, (4) fair cash market value
and (5) reasonable cash market value as these terms are
used in the various constitutional and statutory provisions
pertaining to value for the assessment of taxes, -West
Texas Hotel Co. v. City of El Paso, 83 S;W.2d 772 (Tex.Clv.
App. 1335, error dism.).
Section 20 of Article VIII of the Texas Constitu-
tion contemplates that all property in a county may be
assessed at 100% of its fair cash market value; it has been
uniformly held by the courts that a lesser percentage may
be used where such percentage is uniformly applied to all
property, both real and personal. This for the reason that
the equality and uniformity of taxation required by Section
1 of Article VIII of the Constitution has been satisfied.
City of El Paso et al v. Howze, 248 S.W. 99 (Tex.Civ.App.
1923, e-Clark, 158 S.W.2d 565 (Tex.
Civ.App. 1942, error=, w.0.m.).
You are therefore advised that the assessment of
the tax on the bank stock should be based upon the actual
cash value of such stock less the proportionate amount per
share of the actual cash value of the real estate owned by
the bank. If an evaiuation of less than .lOO$ is used for
some of the property within the county, it must be equally
and uniformly applied to ~a11 taxpayers and property within
the county. *,
SUMMARY
The assessment for ad valoreratax'
purposes of bank stock should be based
upon the actual cash value of such stock
less the proportionate amount per share
of the actual cash value of the real
estate owned b.? the bank. If an svalua-
tion of less than 100% is~uned~ for some
of the property~within the county~,it
must be equally and uniformly applied to
all taxpayers and property within the
county.
Very truly yours,
WILL WILSON
Attorney General
Honorable Burney Walker, Page 4 (Opinion No. ~~-687)
MMP:bct
APPROVED:
OPINION COMMITTEE:
Geo. P. Blackburn, Chairman
C. K. Richards
J. Arthur Sandlln
Howard Mays
REVIEWED FOR THE ATTORNEY GENERAL
By: W. V. Geppert