Hon. John Ben Shepperd Opinion No. v-1264.
Seoretary of State
Capitol Station Re: Several questions relat-
Austin, Texas lng to collecting addi-
tional franchise taxes
imposed by House Bill 285,
Acts 52nd Leg.,, 1951, ch.
Dear sir: 402, p. 695.
Tour request for an opinion Is in part as fol-
lows:
w’upon making a study of the provisions
of H.B. 285 enacted by the 52nd Legislature,
particularly the franchise tax section, cer-
tain questions have arisen as to the inter-
pretation and administration thereof.
”. . .
“In accordance with the provisions of
the resently effective Articles 7084 and
7084, this office has collected from corpo-
rations presently in good standing the fran-
chise tax at the ‘normal’ rate of $1.00 per
$l 000 of taxable capital, minimum 0.00,
ana at the supplemental (Article 70 f e) rate
of an additional l/3 of 10% of all franchise
taxes levied by and due and payable under
said Article 7084.
. “We respectfully ask that you $ve us
your opinion in answering the follm!ing que s-
tlons:
“1. Do the provisions of H.B. 285 as
quoted above require the collection of any
additional franchise tax before May 1, 19521
If so would it cover the entire ie-
riod %m May 1: 1951 to /Lpril 30, 1952; or
’ ‘*
Hon. John Ben Shepperd, Page 2 (V-1264)
would It cover only the period from Septem-
ber 1, 1951 to April 30, 1952 in the same
proportion as that period bears to a full
year?
‘!3ti At what rate is the additional
tax, If any, to be computed and
a.) when ‘is it due?
b) when is it payable?
(c) may collection be made during the
regular tax aollectlon period on
or before May 1, 19521
Would the 25% penalty as provlded
in Ar&e 7091 be applicable to the addl-
tional tax, if any,‘and If so, after what
date would the penalty apple
“5., Assuming that a corporation is sub-
ject to the minimum tax, and has already
paid $20.67 (the minimum under Article 7064
and Article 708%) for the period May 1,~ 1951
to April 30 1952, what additional amount, If
any would ge due under the minimum tax pro-
visfon of H.B. 2851’1
Attorney General’s Opinion V-1248, addressed
to Hon. John Ben Shepperd, Secretary of State, dated
August 21, 1951, held In part as follows:
“In Opinion V-1246, dated August 2l
195l addressed to Hon. Robert 5. Calve$,
campt roller of Public Accounts, this office
held that House Bill 285 became effective
from and after September 1, 195l., and all
taxes of whatever kind or nature included
therein should be levied and collected at
the rates therein prescribed without re-
gard to whether such tax was levied on an
annual quarterly, or monthly basis- Hence,
House Bill 285 imposes an additional fran-
chise tax at the rate of 25# upon all corpo-
rations for the privilege of doing business
in Texas in corporate form for the period
commencing September 1, 1951, through May
1, 1952.”
: l
Hon. John Ben Shepperd, Page 3 (V-1264)
Section IX of-,&use Bill 285 imposes and re-
quires r;he coiiection ci$ an additional franchise tax
at the rate of 25+! per thousand dollars from all corpo-
period from September
ich tax becomes due on
date of House Bill 285.
., 167 s.w.2a 557 (Tex.
Since the Act falls to provide any specific
date for the payment of the additional tax, it neoessar-
lly follows that the tax Is payable on and after Septem-
ber 1, 1951, and collection thereof may be made during
the regular tax collection period on or before May 1,
1952. We believe the foregoing answers your questions
Nos. 1, 2, and 3.
The Legislature did not speolflcally provide
that a penalty would attach by reason of the failure of
the taxpayer to pay the additional tax when due, and the
25% penalty provided in Article 7091, V.C.S., which is
applicable only for the failure to pay the annual fran-
chise tax due and payable in advance QII or before Mav ;L
f each tax&&e VW would not attach by reason of then
iailure of the taxpa;er to pay the additional tax im-
posed by House Bill 285 on or after September 1, 1951.
However, Article 7092, V;C.S., provides that
the Secretary of State, during the month of May of each
year, shall notify any domestic or foreign corporation
subject to the payment of the franchise tax which has
failed to pay a franchise tax on or before the 1st day
of Map, that unless such m tax is paid on or be-
fore the 1st day of July next following, the corpora-
tion’s right to do business in this State will be for-
feited as provided therein. Therefore, any corporation,
domestic or foreign, which fails to pay the additional
tax imposed by House Bill 285 on or before May 1, 1952,
is subject to have its right to do business forfeited
under the provisions of Article 7092, V.C.S.
In answer to question No. 5, a corporation sub-
ect to the minimum tax ~which has alread paid 9520.67
i the minimum under Artfkles 7084 and 708rr, V.C.S.)is
subject to the payment of an additional m&mum tax u11-
der the provisions of Section IX House Bill 285, for the
period September 1, 199 to April 30, 1952, both inclu-
sive, which is two-thirds of one year. The amount of such
Hon. John Ben Sheppira, Page 4 (V-1264)
additional minimum tax would therefore be computed on
the basis of two-thirds of the additional tax of $5.00,
or $3.33.
Section IX, H.B. 285, Acts 52nd Leg.,
1951, ch. 402, p. 695, requires collection of
an additional franchise tax at the rate of
25# per thousand dollars upon all corporations
privileged to do business In Texas in corpor-
ate form for the period commencing September 1,
1951, through May 1, 1952. The, additional tax
is due September 1, 195‘1, is payable on and
after September 1, 195l, and may be collected
during the regular tax collection period on or
before May 1, 1952, without being subject to
the penalty provided In Article 7091 V.C.S.
The penalty provisions of Article 7041, V.C.S.
do not apply to the additional tax for this pe-
riod. Corporations subject to the payment of
an additional minimum tax are subject to the
payment of an addlt lonal minimum tax for the
same period in the sum of $3.33.
Yours very truly,
APPROVED: PRICE DANIEL
Attorney General
Jesse P. Luton, Jr.
Reviewing Assistant
~{q;~~,(&.&.&
Everett Hutchinson. BY
Sxecutlve Assistant C. K. Richards
Assistant
Price Daniel
Attorney General
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