Hon. Robert S. Calvert
Comptroller of Public Accounts
Austin, Texas Opinion No. V-1027.
Re: Classification of the taxes
levied by H.B. No. 3, Acts
51st Leg., 1st C.S., to deter-
mine which are occupation
taxes.
Dear Sir:
Your letter requesting our opinion relating to the above
captioned matter reads as follows:
“Article XIV of House Bill Number Three, Acts
of the First Galled Session of the Fifty-first Legisla-
ture, provides in part as follows:
“‘THE STATE HOSPITAL FUND is created
hereby. All revenue and funds derived under and by
virtue of the provisions of this Act, save and except
any portion required by Section 3, Article 7 of the
Constitution of the State of Texas to be set apart for
the benefit of the Public Free Schools, shall be paid
into such STATE HOSPITAL FUND,onything in this
Act or any other law of this State to the contrary not-
withstanding.’
“I shall thank you to set out in detail, of the
revenue and funds derived under the above named
Act, that portion required by Section 3, Article 7
of the Constitution of the State of Texas to be set
apart for the benefit of Public Free Schools.“
Section 3, Article VII, Constitution of Texas, provides:
“One-fourth of the revenue derived from the
State occupation taxes. . . shall be set apart annu-,,
ally for the benefit of the Public Free Schools;. . .
It follows that one-fourth of the revenue collected upon
the taxes levied by H.B. No. 3 that are “occupation taxes” must
be set apart for the benefit of the Public Free Schools.
Hon. Robert S. Calvert - Page 2 (V-1027)
The following in our opinion are occupation taxes:
Oil production, aas production, sulphur production, telephone
gross receipts, gas, electric and water company gross re-
coipts, carbon black production, cement distributors’, motor
carrier gross receipts, oil tie11 ,servicing, insurance gross
receipts, and chain store.
The following in our opinion are not occupation
taxes: Motor vehicle sales and use, liquor and wine sales,
franchise, new radio, television sets, cosmetics and playing
cards sales, stock transfer, and beer sales.
Our opinion is based on the following authorities:
Producers’ Oil Co. v. Steohens. 99 S.W. 157 (Tex. Civ. ADD.
State v. Humphrey, 159 $g. 2d Id2 (T&. Civ. App:’
1941);‘mDovis, Inc. v. State, 142 Tex. 637, 180 S.W. 2d
429 (leliver Iron Mining Co. v. Lord, 262 U.S. 172, 43
9. Ct. 6&6’m2) Dallas Gas Co. v. 5;tate,261 S.W. 1063
[l)Zl): State Tai Commission v. Hughes Drug CO., 293
S.W. 924 [Ky. Civ. Ann.m: UnitedNbrth 81South Dev.
o. v. Shannon, 115 S.W. 361 (Ttx. Civ. App.m;
tk .CO. v. Sheppard, 219 S.W. Ld 1010 (Tex.
. T 1 Ry Portmxi Cement Co. v. State,
jT:CI Am IWO) Texas Consolidated
Tramp. Co. v. State, 21oV*fJ.W.id 891 ‘(T Ci A 194EJ;
C&b v. HarQin+vk, 144 Ttx. 360, 190 Sf.2dv;90p(?$45);
~octtht~~ RtaIty Corp. v. McCallum, 65 F.2d 934 (1933);
W88f8rn Co. v. Slm 850 (Tex. Civ. App.
5 Enainetrinn Co.. 208 S.W.2d 656
Lee Tiis. Co. v. Love,
urt v. Coowr. 113 S.%‘.Ld
ii9 (Tax. Civ. App. 1938; &t k. Coo er 13dT A. 433.,
110 S.W.Zd 696 (1937); Sec.37J-uOL, c ht.; Attorney
f38Urbl’t @pinions O-4731 and O-4847; Edward Brown &I
Sons v. McColgan. 128 P.2d 186, 53 Cal.App.Zd 504.
SUMMARY
One fourth of the revenue collected by virtue
of H.B. No. 3, Slst Leg., 1st C.S., 1950, from the
followirq ttrts, viz., oil production, gas production,
sulphur producLion, telephone gross receipts, gas,
Hon. Robert S. Calvtrt - Page 3 (V-1027)
electric and water company gross receipts, carbon
black production, cement distributors’, motor car-
rier gross receipts, oil well servicing, insurance
gross receipts, and chain store, must be set apart
for the benefit of the Public Fret Schools, as such
taxes are occupation taxes. Section 3, Article VII,
Constitution of Texas,
Yours very truly,
PRICE DANIEL
Attorney General
BY
APPROVED: Assistant
Charles D. Mathews
Executive Assistant
WVG:amm