E * GENERAL
OFTEXAS
AUSTIN 1~1.TEXAS
January 21, 1957
Honorable Robert 5. Calvert Opinion No. WW-4
Comptroller of Public Accounts
Capitol Station Re: Whether or not, under the
Austin, Texas terms of lease agreements, the
lessors of trucking equip-
ment are liable for gross re-
celpts tax as provided for by
Dear Mr; Calvert: Article 7066b, V.C.S.
Your letter requesting our opinion in reference to the
captioned matter reads in part at follows:
“Sub-Section A of Section I of Article 7066b,
V.C.S. reeds as follows:
iil Each individual, partnership, company, association
or corporation doing business as a “motor bus company”
as defined in Chapter 270, Acts, Regular Session of the
Fortieth Legislature, as amended by the Acts of 1929,
First Called Session of the Fort x-first Legislature,
Chapter 7,8, or as “motor carrier or “contraqt carrier”
as defined in Chapter 277, Acts, Regular Session of the
Forty-second Legislature, over and by use of the public
highways of this State, shell make quarterly on ,the first
day of January, April, July end October of each year,
a report to the Comptroller, under oath, of the individ-
ual, partnership, company, association, or corporation
by its president, treasurer, or secretary, showing the
gross amount received from intrastate business done with-
in this State in the payment of charges for trensport-
ing persons for compensation and any freight or commo-
dity for hire, or ~from other sources of revenue received
from intrastate business within this State during the
quarter next preceding. Said individual, partnership,
company, association, or corporation at the time of mak-
ing said report, shall pay to the State Treasurer an
occupation tax for the quarter next preceding said date
equal to 2.42% of said gross receipts, as shown by said
report. Provided, however, carrier5 of persons or prop-
erty who are required to pay an intangible assets tax
under the laws of this State, are hereby exempted from
the provisions of this Article of this Act.’
. -
i,
Hon. Robert S. Celvert, Page 2 (WW%)
“1 have contacted a number of truck owners for
the tax end have.been furnished with copies of Lease
Agreements, copies of which Lease Agreements, covering
leased commerclel ,vehicles, ere on file with the Depart-
ment of Public Safety in accordance with Article 67OlC-1,
R.C.S.
“lam enclosing e copy of one of the Lease Agree-
ments between OR. F. Moore, L. H. McCeIvey and Joe
Ferguson of Temple, ,Texes, lessors and Baldwin-Hill
of Trenton, New Jersey, lessee.
“Please advise me whether or not, under the
terms of this Lease Agreement, the lessors are liable
for the gross rece.ipts tax provided for by Article
7066b, V.C.S. If the lessors are not required to
pay the tax, please advise me whether or not the
lessee or anyone else is required to pay the tax.”
Under the express provisions of Article 7066b, Vernon’s
Civil Statutes, a gross receipts tax is only levied against
those who transport persons or freight for compensation. Anyone
who transports himself or his own commodities is not subject to
the tax. In doing h,is own transporting, whether h,e uses a
vehicle that he owns, borrows, leases, or rents is im-
material.
We have ca,rafully examined the lease agreement f,urnished
us* and find that same, :gives the lessee full control over the
leased tractors end trailers; that the operators of the vehicles
are to be hired by the lessee and to be under lessee’s control.
It is our opinion that this lease agreement is valid-and, if the
parties thereto operate in compliance therewith, no tax will ac-
crue under said Article 7066b.
Of c-*rrse, if the lease agreement is a subterfuge,
and the lessor of the ,vehicles operates them himself or through
his own drivers, then the lessor is liable four the gross receipts
tax.
Individuals, partnerships, companies, assocla-
tlons or corporations may transport their own commod-
ities by use of leased motor vehicles without sub-
Jetting themselves or their lessee to the payment of
Hon. Robert”S. Celvert, page 3 (WV!-4)
the motor carrier gross receipts tax levied by Ar-
ticle 7066b, V.C.S., whep the lease agreement pro-
vides that the lessee shall have full control over
the vehicles and the lessee is to hire the drivers
and control them. However, if the lease agreement is
is a subterfuge and the lessor retains control over
the vehicles or drivers, the tax will accrue against
the lessor.
Approved: Yours very truly,
Opinion Committee *’
H. Grady Chandler WILL WILSON
Cha 1 rman
I, Attorney General of Texas
Ass1 stant