THE A~BXORNEY GENERAL
TEXAS
GROVER SELLERS Arwrrniu11.-rexAn
A'ITORNWCY DsN*:RAx.
Honorable George B. Butler, Chairman
Board of Insurance Commissioners
Austin, Texas
Dear Sir: Opinion No. 0-6536
Re: Whether ta'xlevied by Art. 7064a,
V.A.C~.S.pard by statewide mutual
assessment association3 operating
under Art, 5068-l may be paid from
their Mortuary Fund, and related
questions.
Your letter of April 16, 1945, requesting an opfnion of
this department presents the following questions:
"1 . May any part of the occupation tax levied
by Article 7064a paid by statewide mutual
assessment associations operating under
Article 5068a-1 be pald from their Mortu-
ary Fund?
"2. May any part of the Federal Income Tax
assessed agatnst and collected from assess-
ment assoctations operating under Article
5068-l be paid from the Mortuary Fund of
such associations in the event that
(a) the premium income is from life insur-
ante pollcles exclusively, or
(b) the premium income is from health and
accident insurance policies exclusively, or
(cl a part of the premium income is from
life insurance policies and apart from health and
accident policies, or
(d) where the premuim income IS from health
and accident policies which include life benefits
or from life insurance policies which include health
and accZdent benefits?"
In your letter, opinions from this department - o-2988,
O-5337, and O-5539 - are referred to in connection with the
* .
Honorable George B. Butler, page 2 O-6536
foregoing questions. In Opinion NO, o-2988 approved January
30, 1941, this department held that no part of the premium tax
imposed by Art. 7064a, Vernon's Annotated Civil Statutes, may
be paid from the mortuary or relief funds as provided for under
Section 12, Art. 5068-i of said statute,
Opinion No, O-5337 holds that mortuary OP relief funds
of mutual assessment associations subject to the rovisionsof
S.B. 135, 46th Legislature (Art, 5068-1, V.A.C.S.F accumulated
or contributions that may be made thereto, should Aot be treat84
as taxable income under the Federal Revenue Act of 1936. This
ruling is based upon and follows ,thedecision cited by you In
General Life Insurance Company vs. Commissioner of Internal
Revenue (5th Cir. Ct, of Appeals, 137 Fed. (2d) 185, decided
July 8, 1943) o In Opinion No, O-5589 we follow the ruling in
Opinion No. O-2988 snd hold tha,tthe gross premium tax levied
under Art, 7064a cannot be paid out of the mortuary or relief
funds described in Sec. 12, Art, 5068-1, V.A.C.S. Said
opinions are applicable to statewide mutual assessment assocl-
ations operating under and subject to the provisions of Art.
5068-l.
Answering your first question, therefore, you are re-
spectfully advised that no part of the receipts tax levied under
Art. 7064a may be paid by statewide mutual assessment associ-
ations operating under and subject to the provisions of Art.
5068-1, V.A.C.S,, from their mortuary funds.
As to your second question, you doubtless have in mind
the provisions of Art, 5068-4, V.A,C.S, enacted by the 48th~
Legislature, effective May 1.8,1943. This statute was referred
to in Opinion No, O-5337 and should not be given any greater
import than the intent of the Legislature can be gathered from
its language. This statute provides:
'Any company or association operating
under the provisions of Senate Bill No. 135,
Acts of the Regular Session of the 46th Leg-
islature, Chapter 6, page 401, may pay from
the mortuary or relief funds by whatever name
It may be called any taxes that may be assessed
against or required to be paid by the company
or association because of income to such funds."
.
As recognized in the last above cited opinion, the fore-
going statute would permit payment from the mortuary or relief
funds of any legally assessed income tax against OP required
to be'paid by the company because of such funds being held tax-
able as income under the Federal Revenue Act.
Honorabie George B, Butler, page 3 O-6536
Answering your second question, i.tis our opinlon ttiat
only those taxes legally assessed under the Federal Internal
RevenGe Act against the mortuary or relief funds, collected
from or required to be paid by assessment associations subject
to and operating under the provisions of Art. 5068-1, V,A.C.S.,
may be paid from such fund. Any portion of the funds of one
club or class;,bowever, may not 'beused to pajisuch
g'ro;*p,
claims or obligations of any other group, club or class as pro-
vided In Set, 12 of said statute,
Yours very truly,
ATTORNEY GENERAL OF TEXAS
By s/Wm. J. R. King
Wm. J, R. King
Assistant
WmK:LJzwc
APPROVED MAY 3, 1945
s/Carlos C. Ashley
FIRST ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/BWB Chairman