Untitled Texas Attorney General Opinion

546 OFFICE OF THE ATTORNEY GENERAL OF ‘TEXAS AUSTIN Hon. M. 0. Plo.omrE aaoratary of at6t-a Austin, Tezar Dear Ylr I Attant lent Mr. emit whloll subatantle llr rmttcln rrqtiina 4 un4w Artlola 0 reaoraal O? oa to bo olosr4 dbtdJ F--d- 1, an6 fron aoh arfl- lta r ntia an4 rocrlhrt lnnehlr* tsix au. nq 1; i rrrotra qu6etlonr. roaolpt or your lettar or Mavrbar you submit tha following qaeatioaa lor an opihion: the 8eoretery of Statr author- cupowsred to cot tin&r Artialr &~EI and require a beginnrr eorporatlon to file an afficiatit, p~hlab would pror&ddr nub- 6tsntiallp the lxam information n'ulma to be coapllei4 undw Article 7089, 6n % amu* the rrcom3s of eueh oorpemtlon to be ale6e4 at8 detr inanramel8- prroeding May 1, mn4 frtm mioh atfida*it datermine and aollrst th6 ?r6nahir* ti8X duo xes l? --- .---^..---” -..- .- ^_..C “i-Y-l.l .,D .TsoaI 1-m*.-.... 547 Hon. M. 0. Flower-a, pafle 2 (2) If the answer of tha above qusa- tlon Is Tua-, should the demand upon tba corporation requlra tha books to br closed on R definite data, or upon an lud~flnlto data to br daterained by thr oorporatlon from a standpoint of oanrenl*nar end 88 mar to May 1 es poniblr, whloh would anablo thapi to filr the repar t and pay thr tama on that date3 (3) Ii tha rooorda are to be closed at CLfixed time, what data should be the 0loalng time? (L) If it ban km deold.4 that we do have tlxla authority, would this Depart- sent havr the further authorltl to audit ell beck irunohiar tax aooounta and ro- aaaaaa franehlao tams, or would tbr state ba estopped by this prior drpartaantal praotlcr? Artlola 7084, Ravlrd Civil Statutaa, 1925, as amnaod, reads in part as follouar *Lxorpt am heNin provided, arrry domuatlo end forrltp oorporetlonhereta- rora or heraaftar ohartrrrd or authorized to 40 bualnoaa In Toxaa, shall, on or br- rorr May 1st oi oasoQ par, pay in advance to the Saemtary of State a rNnQhl88 tax for the yaar following, bared upon that proportion of the outatandlng oapitel stook, . . .” Article 7086, Revised Civil Statutoa, 1925, provldoa In part: Whenaver a private dolpsatia clorpora- tlon la chartrmd 5.n this Stat., . . . such corporetlon shall ba repulsed to pay in advanor to the Seoretary of Btato, as Its tranch~ae tax rrcin that tlaw doom to and inol~dlllg the thlrti(lth day of April next iollowln~, only such prOpottlOnata pnrt 548 Eon, M. 0. Wmara, pafw 3 Of its 6~~1 ?ranUhIaa tax, as trrainabova pnaorlbad, aa the period OS tim baswaan the aat0 of ?lling of its artIcl88 of in- oorporatlon or tha lssuanoo OS its grrmlt to do bualneos, as the aese oay be, and on the firat day of Alay ?ollouin&, boars to a aalrndsr par.” Artiols 7087, Rsylaad Civil Statutes, 1925, ma48 08 Tollowar “To dcGomine tb amount or the flrat franohhiae tax pamnt raquirad b thla ohaptrr of any dcuaati~ aorporat I 011whloh MJ ba braetter ohartered, or OS any SOT- a&n oorporstlon whleb my hsraaitar apply ror a perrrlt to do buatlnaaa within thla Stab, end also to drkrdae tb aorrrst- maa 0r any rrport *hIoh 18 provided Sor In this ohaptrr, tha Edoratary of Btata mar, whwvrr he daraa It neao8aary or pro-r to protab3t th8 intweet* o? th St&+, rrqulrr any on0 or Q0rs of the of- floors or such oorgoratlona to mLJ aPd fllr in the o??loa or the Saontazy of State an ~r?ld~ylt setting Sorth Sully thr rocto oonowninc, the mount of ths aurplua am3 utilirldrd prallts, roapaotlval~, l? any, OS such dolvatla or foraign aorpora- tloon; and until tha Gaoratary of State ahall bo rull~ astia?lrd ae to thr amount OS aaah aurplua end undlvldrd protlta, rag ootlvelr, l? any, he shall ntt Slle thr artlolaa of lnoorporatlon OS auoh pmpoaad 4omaatlo oorpratlon, or issue such peralt, or aa- aapt such Sranohlae tax.* Art1610 7089, Reviaad 01~11 Eltatutee, 1925, reeds as rollowar i 549 Hon. U. 0. Flowms, peer 4 wEccept as hsrrir, ~mvldad, a11 cor- 2oratlms now required to pay an annual frenchles tax shall. between January lot erd i&ml; 15th of aaah yoer, m&e a aworn roport to the 8aomtary of 8tata. on blnnka fumlrhod by that officer, mowing the oondltlon of suoh corporation on th lart day of ita preoading flcloal year. . .I (Tha atatuto here mkrs tsrlous provl111onn QGnaOruiug tha oxrtant8 8nd fill&3 Of fhr report, ana other mtterr.) Artlalr ?W?9a, F%~vlmd Civil 6tatute8, Aots 1930, 4lat La&lslaturr, 5th Called 68rslon, p&go 220, Chapter 66, R~otlon 4, read8 aa followat 'The f'orprs prrrarlbad shall eoataln other information a8 the Baoratary or Stat0 may drain adtlrabls end ha ma,r adopt rulem and ragul9tlons prorldi~ for the anrome- mnt of the pmvlslo~ hrroof sod may ro- qulrs cor~orstlona to mum auoh moor66 MI say be naorrssry In dotrrinlnlng tha aaonnt cf taxaa that may k dua herrundsr. No tar shell be paid Wloh my not be col- ;;;IM;~ andar tha Stats atId Fadwe Conotl- .” Your lettrr dlsoum~ the eboro quaetlona end atcatuks contlrmek as lollowt ‘For t&r purposes of thti opInlon oonslder a corporation formed between January 1 and May 1. Artldrm 7086 and ‘Jo137presarlba the proowkm to b8 Ml- 10~~~3 in asorrtainlng the correot aaount of tax due rrtxu data ot inoorgoration to nay 1. Article 7089 raqulrrr all ompor+ tlons to file betwarn Jen~r~ 1 and bieroh 15 or wioh year (whioh tlms my ba ertrod*d to %ay 1) Q rranohlse tmx report showin% the candltlcn or suah oorpomtion on the l~Jt day or lta praosding flecal yeer. Cbviaun- ly tl corporation fx:aorpomted during th* tima under oonsldsretlon has not had suf- ficient tirns prior to Malay1 to oo@5t* a risoal year. Artlc.l.8 7087, on tha othar 550 Bon. M. 0. Fl08ar8, pa&a 5 hand, maraly prasorlb88 tie pmeadura to ba fOllowa in d8tarmlning tha tax rrom data bf lnoorporatlcm down so May 1, and maker no mantlon ai tie method to ba fol- lowad in aaeartaln* the tax due on May 1. Art1018 7089a ~rorldaa that the horatr~y or Stata say edapt rule8 ma ragulatlon8 prorl4lng for the anl’erorm8nt of the pro- vision8 oi Art1018 7089, and amy raqulr8 oorporatlona to 0~88 ~ruoh record8 81 m8y b8 naoa88ary la data~lnleg the amount or taxer that nay be dur under Artlola 7084. ‘?A8 8n illurtr8tfon of tin problem OOUiZW&ing thil 0ffiOa ~8 sita th ~!88a Oi a oorpor8tlon lnoorpor8trd February 9, 1938, with a oapltal of $209 000.00, who88 trxeblr oapital ~88 lnoraaaa4 ~~3.,000.00 two~daJr8 th8raaftar. Traqusatl~, oorporetlon8 8rc4 araatad for the purpoos o? borrowlag sonar to prwen$ lndlvlduetl liablliQy. 0n the oth8r hrnd, tha eorporatlon sight luoraara (T de- oraaaa I t8 aapltsl ltook, or be eonrayed a t-8 uD0m 0r 88m8 *iah would ozuati a larea rurplus bat-an the data o? lneorpora- tlon and the followfail May 1. "It ha8 bean a oonattant praotloa bi thia otrloa for the Charter Mvision to a@- oartmin tba amount or tar &a at tha time of lnaorpontlon, and also 8Urin the asrpon- tlon of tha mount of tax &a on H8r 1 follow- lng the data of inoorporatlon,barrd upon the taxable 011plb1 dlsolosrd by the @hertar. "While th5a la @ia ouatomary and moat lxpsdiantmcsthod ofhandllaQ the a8tt8r,th writer 18 umbla to rm any 8Qatutory rwthor- lzation ior the oomputation of thr franshin tax due on May 1, in this (Banner, n&W18 thare any spaolflo 8tatnterp authotizatlon for the acmpll~tlon or this tar by 81~ othar mam8, other then tha ponafbla iapliQatiOn Of Artlola 7069a. * 551 Hon. Y. 0. Flusara, page 6 The AttotmJ Oanarti ‘8 opinion to whlnh you refer, addra8aad to Hoa. W. W. Eaath, tlatadOetobrr 18, 1934, nrkar the Sollouing rulkpgo: * it 18 th8 O@liOE Of tbr WrikX that 8ia'a&81 X8pOl-tto ba SIM4 b tW8m Jaauarf lrt and Marohl$$h should rbaw tb oonditim of a oorporstiem oa tbr hat day of 1 ta pnardiag flMa1 yasf prior So $Sn- wary 1st. . . . I) It 0pin10n 18 th or Oh8 altar that b;S&; a ~omortio eorpvmtloa fr rrq~irrd to Slla what ~001p term a rawlar report and 8ufSargaaaltla8 tha:aree for railmu to rile said report, itaut have brd a vomplatr sir081 ear priar to the tima la ahlob It Ir :' raquka 3; to f&la its annul rcrprt. ti otbr *ordO, it EUUt h8~8 hf4d 8 ~O!@pl@tS ?bOdl year prior to fabuary 100.. ". . . X will statr Ub if a dOluSti0 corporationhas had a @oil ate f%a81~ yam? prior to JaaMxy lst, it SOQU$T86 to s&l* it8 8nntl81rrporo b.twraa~Yalmar~ let an4 X8rohlJth,andtbr fraaohla8 tarIP8tai neo888ity ba baro&kp. 8&a NpOd. on th8 othar hand, ii the"-tror#Wat~on I8 not liabla r0r the ririira of an annrul report, rlnor it hnd 11~ ii8Oa~ Ptr,, tbm tOP SUPt OOIP- pat8 the t132sxos the n~ooxar Ln pur 0rf-m .' relating to SU8h OQrpVa%irJa, ~888 YOU deem other InSormtIon moa8sary to datarm& the amunt of tax that m)r br OU@. In 8aeh avant you m8y raqulrr 8n Sfs~uEVit,ex ur xaquira ruoh oorporatlonto aura,8aah m- cords ar you dora aaoa8aa~ In datermlnlqg the amount of tax t&at rry ba dU8. * Han. Ii. 0. 7low~rr, pa&. 7 Tha faot that 8 beglnnrr oorporatlon nr lnomasa its taxable capita1 and.2 ArtIola 7064, b- tveerl the date of IaoorporatIon ena xaf 1st without atioh increasei bakq tarrble under your baparwental prsatlaa a006 aot plea43 it In 6 dlffor8nt porlaio~l from an older oorpomtion whI0h Iaorra8rs It8 oapltal on Ma7 2nd or brtursn its pneoding flroal 0108lng 11x3 Ma7 lat. Opinion lrlo. o-764. We l&ma with 7our oonolwio~ that the rrtatutem do net mike datlnlta provloIon for tkn proordurr to k miOW8a 133 08O~Tti~~g t&0 MOtUIt Of 08X i%M its 8d~811418 on the bfa7 lot next w0t3*0aiag tbr iaoorpomtIon or l k- glnmr aorporetlon. Thi8 kilt% trtra, th6 lO= $Og;.'i;hd WI4 00moIobmt 00LutTu0t10aeul pre0tIor of mat, whloh you alao 8teta la thr m8t 8~~6 r@ on’;,& th#- lamgae6gr ot tbr ootut in a* 1, ALtl8l¶tI9 PIN L (Tar. Clr. App., 1939, * reihmd), 134 8 a t2aj 322, 'mo)f WWMfOM booonm 8 bO%Omini~~(& &O&r. J8- BeOiall7 i8 tb18 t?U* ra&?~tdili& rOVOnU.uI *OaOltr@8, the lbmin~tzation of whlob ,&a (Lll&8r eoa8turt ob8an~tioa Of tO0 10&i818ttlSS.w Youra var7traly ATTORSBY OtlilWRAL01 TUXA8