T
February 20, 1952
Hon. Robert S. Calvert ~~ Opinion No. V-1408
Comptroller of Public Accounts
Austin, Texas Re: Applicability of gross re-
ceipts taxes to air~express
revenues received by Rail-
way Express Agency, Inc.,
Dear Mr. Calvert: under the submitted facts.
You request the opinion of this office upon the ques-
tion presented in your letter of January 23, 1952, as follows:
“Article 7058, V.C.S. reads in part as follows:
* ‘Each individual, company, association or :
corporation doing an express business by steam rail-
road or by water in this State shall make, quarterly,
on the first days of January, April, July and October
of each year, a report to the Comptroller, under oath
of the individual or of the president, treasurer or
superintendent of such company, association or cor-
poration, showing the gross amount received from
intrastate business done within this State in the pay-
ment of charges from express and freights, or from
other sources of revenues received from intrastate
business during the quarter next preceding.’
“I am enclosing copy of Air Express Agree-
ment between Railway Express Agency, Inc. and the
various air lines ~4th which they do business.
“Please advise me if the air expres~s revenue
received by Railway Express Agency, Inc.. under the
terms of the agreement, is taxable under the provi-
sions of Article 7058, V.C.S.”
With your opinion request you submit for our exami-
nation a contract form behveen Railway Express Agency, Ipcor-
porated, and the air line company referred to in the contract as
“Air Company, * which covers the contract or agreement between
the express company and the air company with respect to the un-
dertaking on the part of the air company to transport by air ship-
ments of the express company. This contract is lengthy and
somewhat involved, but it is sufficient to say that the air company
Hon. Robert S. Calvert, Page 2 (V-1408)
undertakes in behalf of the express company to perform by air
express a certain part of the transportation of the shipments
contemplated by the contract. The express shipments involved
begin and end with the express company, the air company per-
forming the intervening transportation.
Article 7058, V.C.S., tevies a gross receipts tax
on express companies carrying on business *by steam railroad”
and requires such express companies to file h4th the State
Comptroller on the first day of January, April, July and Octo-
ber a report “showing the gross amount received from intra-
state business done within this State in the payment of charges
from express and freinhts, or from other sources of revenues
received from intrastate business during the quarter next pre-
ceding.” 1 At the same time such companies shall pay to the
-SEItereasurer -an occupation tax” for the succeeding quarter
“equal to Two and One-half (2:s) Per Cent of said gross re-
ceipts” as shown by the report.
Specifically, ‘your question involves the receipts by
the express company derived from that part of the transporta-
tion performed by the air company.
Article 7058 was amended by House Bill 648, Acts
42nd Leg., R.S. 1931, ch. 222, p. 376; and certain changes were
then made to the original act. The word Usteam” was added; so
the act, as amended, applies to express companies doing an ex-
press business by steam railroad instead of by railroad as was
provided in the original act. The following was also added:
*
. * . or from other sources of revenues received from intra-
state business during the quarter next preceding.” The only
other change made by the amendment to the original act was to
provide for quarterly payments instead of annual payments. We
find upon examination of the emergency clause to this amended
act a clear expression of the legislative intent. It reads:
“The fact that it will be beneficial to the reve-
nues of the State to have express companies pay a
quarterly tax in lieu of an annual tax, and the further
need of amending the statutes so as to make same ap-
ply to express business done on other carriers than
steam rai roa s, . . .
We are here primarily concerned with the following
expression appearing in the body of the act and constituting a
1
Emphasis added throughout.
. . :
Hon. Robert S. Calvert, Page 3 (V-1408)
part of the amendment: * . . , or from other sources of reve-
nues received from intrastate business during the quarter next
preceding.” This phrase, construed in connection with the ex-
press purpose as stated in the emergency clause, leads to the :
conclusion that the receipts from such air line transportation is
subject to the tax. In brie&; the purpose of the amendment was
to impose the tax not only upon the receipts from that part of
the business done by the steam railroads, but also upon other
sources of revenue derived from express business done by
other carriers for and in behalf of the express company.
SUMMARY
An express company is subject to the gross
receipts tax imposed by Article 7058, V.C.S., on
that part of its receipts arising from transportation
of freight by the air lines in behalf of the express
company.
Yours very truly,
PRICE DANIEL
Attorney General
APPROVED:
W. V. Geppert
By
L?&?o13f--
Assistant
Taxation Division
-
Mary Kate Wall
Reviewing Assistant
Charles D. Mathews
First Assistant
LPL/mwb