OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Honorable George B. Shepparb
Comptroller of Pub110 Aooounts
Auatln, Texas
Dear sirr
to the Stat
tares. ThI
s not heretofore been oonaldered
by this department, we deemed
ore rintuy rendering our oplnlon
epartment at WashIngton It there
between our government and the RepublIo
s us, however, that property owned by
our government and used for embassy and oonsular purposea In
Yexloo City is not taxed by the Mexloaa Government. With
his letter he ha8 kindly submitted copies of oplnlons or the
Attorneys General from the States of Callfornla, Miohlgan and
Massaohusetta oonelderlng this question, all hole property
or foreign governments In their respeotlve states used ror
goveramental purposes free from taxes. We wish to arrknowledge
the kindness of Yr. Haohorth and his valuable aid to us In
the oonelderatlon or this questlon.
Honorable George R. Sheppard, Page 2
0~ inveetigation has extewled beyond the lawa
0r our own State, an& we hare not found a oa89 paseing
dIraotly upon tha question oontalned In YOU letter. Re
belleve, however, that ruiriqient analogy oxlets to the
easea we haye round to support .the OOnOlUlOn we haYe
reao hod.
1t may be oonoeded that the language 0r the.
Coaatltution is broad eoougb to Inelude all property rlthln
the jurlsdlotlaa of this State as subjeot to taxation unlesr
lxpramly exsapted br the Constitution and statutes of this
State, and that the provision In our Constitution WhIoh
erempta pub110 property usad ror publlo purpoeea applier
only to pIWOrty owned by the State or some polltfaal dIYI-
aioa thereor., Thle being true, the question Is: ‘Did the
tramers of the Constitution Intend to tax the property of
a ioreign rovereignty under the oiroumetsnces involved here?
AII stated In the OaBe of Prenoh Republlo Y. Board
of Supervisors or Jeiieraon County et al., by the Court or
Appeals or Kentuoky, 252 9. W. 124.1
“In oonetruing the taxation provIsIon or our
Constltutioa, we a;rii be oareiul not to overlook the
.:. !: ~,:aaturo or a tar. an enforosd oontrlbution or
money or other property assessed ln aooordanoe with
some reasonable rule or apportionment by authority 0r
the eoverelgn state on persons oi property within its
jurisdlotioh for the purpose or defraying the pub110
expense.” 26 R. C. S.,page 13
We take the liberty to quote Word this ease rather
rullg, aa it more nearly expresses the reaaona for our holding
than any other ease we hare round. In this ease the State or
Kentuoky sought to tax a large quantity of tobaooo that had
been purahased by the Prenoh Gorernaent for fmbsequrnt export
to the Republlo of yranoe. ThO Frezioh Government re.sIsted
the assersment and oolleotlon or thle tax by the State or
Kentuolq-, and the oourt ln passing upon the qulatlon raid:
*It is oonoeded that the Frenoh Republlo is not
suable In our oourts without its oonsent, and that the
tobaooo lteelt oannot be subjeoted to the payment or the tax.
Therefore, ii the assessment be upheld, we have no way or
oolleoting the tax. We can neither negotiate nor declare
war. All that we oan do Ia to ask the State Department to
open international negotiations, or persuade Congress to
deolare war, for the purpose ot oolleotiag the tax, thus
Honorable George &Sheppard, Page 3
presenting a etate of hilpleaaneaa wholly at varlanoe
with the sovereign right oi taxation.
“Ia the next plaoe,.taxea are Imposed on the
theory that the taxpayer should pay a portion or the
expense Inourred In the proteotion of hle person or
property, and a8 applied to ordinary peraonmr.and
oorporatlona this prlnolple seem8 eminantly fair and
@at; but aa applied to independent natlona It Is
olearly oppoeed to the apirlt of InternatIonal amity,
whioh should prompt every n&tIon to guard and proteot
the personal property of all other nations that happens
to be temporarily within Its jurIadIotIon, without
levying a tribute for that purpose.
“Another oonalderatlon not to be overlooked la
that the abeolute sovereignty oi every nation within
Its own terrltorg does not alwaya extend to roreign
natlcne, but la subjeot to oertain limitations aano-
tioned by the law of nations and lmpoaed by its own
oonaent. As said by Xr. Chief Yustioe Marshall In
the Sohooner Exohange v. MoFaddon et al, 7 Cranoh 116,
3 L. Ed. 287:
*)A nation would justly be oonaidered as violating
Its ralth, although that ralth might not be expreealy
plighted, which should suddenly and without previous
notioe exeroIae its terrItorIal powers In a m6nner not
oonaonant to the usages and received obllgatbone of the
oIrIlIzed world.’
*Henoe, Ir one nation enterakthe territory of
another with Its oonaent, ior the purpose oi mutual
Interoourae, it does so with the Implied understanding
that it doe8 not intend to degrade Its dignity by plao-
lag Itself or Its sovereign rights wlthln the jurladlo-
tlon of the other, and we know of nothing more oaloulated
to degrade the dignity or an Independent nation than for
another to attempt to exeroIae over It the sovereign
right of taxation.
Eonorable George H. Sheppard, Page 4
..
Woreover’, the provisions of our Constitution
rhould be oonatrued In the light oi history and the
unliorm dealing or one power with another. So tar
aa we are aware, no state and no nation, at the time
or the adoption oi our Conrtltutlon, had ever assumed
the right to tax the peraoxial property oi a qorelgn
power that happened to be temporarl3q wlthIn~~lt8
jurladiotIon. Indeed, there were ntmeroua treaties
exempting ordlnaq oonrula from pareonal taxation,
unless they were oitlaena and owned real estate, or
were engaged in bualneaa where the ooneulate was
Ituated. United States Oonaular Regulations 1696,
8 63; 7 0~s. Attys. Gen. 16. Therefore we are oon-
etralned to hold that the framers of our Conatltutlon
did not Intend to inaugurate a policy so opposed to
International usage, so lnoompatlble with the dignity
or Independent nations, and so likely to result In
the loss oi the good will or those whose frIendahIp
we hare always prleed. As the property was not taxable,
It should not have been aaaeaaed.
9. . .”
It Is true that this oaae Involved perronal property,
but we do not regard this raot au.rrIoIant to ohaage the reason
underlying the exemption as expressed in this oaae as It would
apply to real property.
It la turthar noted that thla oaae advanaea as one
reason ror the exemption the lmpraotloablllty ot oolleotlng
taxes by one government from another aoverelgn government
by any legal ~prooeaa. True, this does within itself afford
a reason ror the exemption, but we ara lmpreaeed with the
broader prinolplee upon whloh the oourt baaed its deolrlon
namely, the obaervanoe and malatenanoe oi smiabla lnternat i onal
. relatlona.
We take It that regardless of the various ways anrule
of Iatematlonal law may arise, one of the moat aatIaraotory
methods would be by the mutual reoognltlon of Its exIatenoe bp-
tween the governments oonoemed. Slnoe the Republlo of Mexico
has aooorded rreedom from taxation to the property oROur
government used for fta embaaalea an4 oonaular oiiIoeC~ln
Kexloo Olty, t%Ia alone would In our opinion afford the moat
Ronorablb George ii. Fheppard, Page 5
I \
,’
lau4able rosson Par the exemption from tcxatlc,n by our State
an4 the various politioal sub4lvlslons thereof of the property
or the Yexloan Govera#.nt looate in our state US44 for 0fri0Q6
an4 bouslng of its 4Iploaatlo rapressntatlver. We should reoog-
nlzr this as a binding obligation upon us under 1aternatlons.l
usagb an4 international law. The Paquets Ravana, 175 U. S.
677, 700; Sklrlotaa v. State of Plorlda, 313 U. S. 69,.72 L.
Ed. 824, 827.
In the oaee of Hasbn v. Intercolonial Railway, 197
Uass. 349, mentlog 1s made of the theory OS Impraotlcablllty
of one sovereign ‘&bate enrorolng~ the oolleotlon of tares
ag&Inst another/stating:
;
“. . . Buti the rule upon whioh these decisions are
base4 goes muoh deepQr than a refusal to assert mere
judlolal jurls4lotIon. It Involves a waiver of all
sovereign power. Ii a nation permits a rorelgn sovereign
or hls orflolal represertatfves to enter the territory
of that nation or to hold property thereln, it lmplle4ly
oonsents that all sovereign rights of suoh foreign nation
shall be recognized. One or these essential rights is
Independenoe of every other sovereign. For the Coq;lon-
wealth to Impose a tax upon the property of any sovereign
within Its borders would not only be exeroislng a jurls-
diotlon to interfere wlth the rights of that sovereign
In suoh property, but would be taking the further step .
of attem.ptIng to Impose an obligation upon such sovereign
to oontrlbute towards the publio expenses of the Com~non-
wealth. It would be asserting s JurIsdiotIoW mcro fmda-
mantel in. character, 6ver1, then judicial jurlablotion.
# In my julignnent, the tax statutes of the Cosc;onw&alth must
*_ be read In the light of these prlnolples, and when so
read, they roust be oonstrued ae not asserting any poser
to tax which Is ct variance with them.”
We find the following In the case of firin_ya v.’
Ughtboeta, 11 fillan 157, li%:
“The jurle4IotIon of eaoh independent nat Ion is
neoessarIly.excluslve and ubcolutc wlthin its own terrl-
tory. However, by oommon consent among clvlllzed nations,
a oonsent largely implled from oon%on usaga an4 the neoes-
sltles of mutuel lnteroourse, that absolute jurisdiction
Honorable George Ht Sheppard, Page 6
.
Is not assQrtQ4 against torrlgn sovereigns or their
eorerrlgn rights. Whether this be aalled a rule or
oomlty or of law, it has beoome a settled prlnolple
ot International relations rhloh has long been reoog-
nIzQ4 by the SUprQmQCourt or the United States.
SOhOOn6r Exohan&Q v. fl*Fabdon, 7 Cranoh, ~6. It Is
well settled that the oourts ot one nation will aesert
no jurlsdlotion eIthQr against the person ort8hQ..
property ot a foreign sovereign. Brlggs v. Lightboats,
11 Allan, 157, 184.”
It Is apparent from the roregolng that.wb are
of the opinion that property situatpd In this StatQ, whioh
ia owned and used by the Republlo of Mexioo for govern-
mental purposes, whether real or personal, Is not subjrot
to a4 valoren taxes by this State or any polltloal sub-
division thQrQOi, and you.are aooordingly so advised.
. Yours very truly
ATTORNEY
GENE!W OF TEXAS
BY