393
OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
,Honorable J. F. Lindsey
Assistant County Attorney
Jones COllIlty
~nabn, Texes
ear es per
You submit for th Is department the quee-
tion aontalned in go reading as rollowsr
lnlon or eny aopl8a
Ing the lnterpra,
Statutes of Texas4
Under Art. 7165, R..C. S.,
atement at the..a$ose of'
wpald dlvldendr In the sum
dpens ror business on
da have been paid out to the
la $12,500.00 be assessed ror
lng January lst, as personal
presented la.'whether the $l)12,5OO.OOreileat-
etement of the bank as ot Deoember 31, as
stltutes personal property to be eooounted for
by the bank under the provisions of Artlale 7165, R. 0. 9. or
whether or not ei of ranuary 1, these dividends had been paid to
the stookholders, and hence oonatituted peraonal property in the
hands of the stockholders. Artlole 7165, R.C.S. reads as rpllows:
*Every bank, whether of Issue or deposit, banker,
broker, dealer in exohange, or stook jobber, shall at
the time fixed by this ohapter for listing personal
property, make out and furnish the 8saeaaor of taxes
a sworn statement showing:
394
tfonorsble J. F. Lindsey, Page 2
9. If a national bank, the president -or some
other oiilcer of auoh bank shall furnish to the aa-
aessor of the oounty in whloh euoh bank 1~ located a
list of the names of ell the shareholder8 of the stoak,
tOgether with the number and amount of the shares of
eaoh stockholder or stook in said bank; and the ahare-
holders of the atook in national banka shall render to
the tax aasesaor of the oounty in whioh said bank la
looated the number of their shares and the true and
lull value thereor. All aharea of stook in national
banka not rendered to the asses&or of taxes ln.the ooun-
tg where such bank is looated within the time presorlbed
by law for listing property for taxes shell be aeseeeed
by the assessor egalnet the owner or owners thereof
as unrendered property la. eaaeeeed; but the tax roll
shell show the name of the owner or ownera thereof a8
per staterctint rurnlshed by the president or other ot-
rlaers of said bank.
“2. National banks shall render all other bonda end
stook of every kind, exoept United States bonds, and all
shares of capital &oaks or joint atoak or etooks of
other oompanlea or oorporations held as an investment
or in any way representing assets, together with all
other personal property belonging or pertaining to said
benk, exoept euoh .pereonal property aa le epeoially
exempted rrom taxation by the laws of the United Statea.
“3. National ban& shall be required to render all
of their real e&ate aa other real estate I8 rendered;
.and all the personal property of aald national banks here-
in taxed shall be valued a8 other personal property la
valued,
“4. All other banks, bankere, brokers, or dealer8
in exchange, or etoak jobbers shall render their list in
the following manner:
“(1) The amount of money on hand or in transit or
in the hands of other banks, bankers, broker8 or others
subjeot to drart, whether the same be in or out of the
State.
“(2) The amount of bills reaelvable, dlsoounted or-
purohased and other oredlta due or to beootie due, lnolud-
lng aooounta reoelvable; lntereefi aoorued but not due,
and interest due,and unpaid.
“(3) Fran the segregate amount of the items
named in the rlrst and seoond of the last two SUbdi-
visions shall be deduoted the amount Or money on depoeit.
395
Ranorable J. F. Lindsey, Page 3
n(4) The amount of bonds and atooks of every kind,
exoept United Statea bonda, and all sharea of oapltal
atooks or joint stooka of other oompanlas or oorpora-
zi;t;ahald a8 an investment or in any way representing
.
“(5) All other property belonging or appertaining
to aald bank or business, lnaludlng both personal prop-
erty and real estate, shall be listed aa other personal
property and real estate.”
It la observed that the flrat three aubdfvlslona of said
artlole apply exalualvely to national banks. Subdivlelon No. 4
applies to *all other banks”. Artlale 7166, R. C. S., 1925, ia
applloable to every banking aorporation, State or National, and
providea for the rendition of real estate owned by the banka, end
ror the manner or aaaeaament of real eeteta of the bank, and or
the ahares of stook owned by its etookholdera in the following
language t
TWery banking aorporatlon, State or national
doing business in this State ahall, In the oity or
town In whlah It 16 looated, render ita real eetete.
to the tax aaaaasor at the time and in the manner re-
quired of individuals. At the tlme Of making auoh
rendition the president or some other orrlaer or eaid
bank shall rile with said aaaeasor e aworn etatement
showing the number and amount of the aharea of aeld
bank, the name and realdenae of aaah ehareholder, and
the number and amount of aharee owned by him. Every
aharaholder or said bank shall, in the oity or town
where said bank la looated, render at their eatual
value to the tax aaeesaor all shares owned by him in
auoh bank; and In oaae of his iallure ao to do, the
assessor shell aaaaea auoh unrendered share8 aa other
unrendered property. Each share in auoh bank shall be
taxed only for the dirrarenoe between’ite aotual oash
value and the proportionate amount per share at whloh
its reel estate la aaaeased. The taxes due upon the
shares or banking oorporatlons shall be a lien thereon,
and no banking oorporatlon ehall pay any dividend to
any shareholder who la in derault in the payment of
taxes due on his shares; nor shall any banking oor- _
poration permit the transfer upon ita books of any
share, the owner of which is In default in the pay-
ment of his texea upon the same. Nothing herein shall
:’ .:’ 396 i:
Honorable J. F. Lindsey, Page 4
be so oonstruad as to tax national or State banks, or
the shareholders thereof, at a greater rate than la
assessed against other moneyed oapital in the hands
or. lndlvlduals.n
Under the two toregoing artlolea, namely, 7165, 7166,
supra, it is observed that real property of a bank is taxed a-
gainst the bank, while the personal property is taxed against
the shareholders. City of Marshall v. State Rank of Marshall,
127 S. W. 1083 (error refused), 6 Tex. Jur. 346, at seq.
We are constrained to the view, under the faota sub-
mitted by you, that the $12,500.00 rerleoted In the bank’s
statement as dividends, is personal property taxable to the
iddlvldual shareholders, regardless of whether or not it had aa-
tually been paid out on January 1 to the ahareholdere as dividends,
for the reason that it had been set aside by the‘bsnk ror the pur-
pose of paging the dividends and no longer oonstltuted an aeaet of
the bank. If It had aatually been paid to the atookholdera, or
your letter lndloates, it would be treated ior the purpose of taxa-
tion Ii in the hand8 oi the shareholders on January 1, as any other
oesh aseeaaed by the shareholders. If it had not been aotually re-
aelvad by the shareholders, it constituted a oredlt in favor of the
shareholders and a debit agalnat the surplus or undivided profits
of the bank. If the dividends had passed into the handa or the
etookholdera on January 1, auoh dividends had been reduaed to own-
ership and possession in i&e hands of the shareholdere, and elnoe.
In any event it had been sat aside by the bank, presumably agalnet
surplus or undivided profits out of which It oould be legally
paid, and oonstltuted a taxable asset in the hands of the stook-
holders.
You are therefore reapeotrully advised that It is our
opinion that this item or dividends in the sum of $12.500.00 Is
not to be taken into eoaount by the bank as of January 1 In render-
ing its atatament to the assessor ror the purpose of aesesament se
provided in the two foregoing artiolea, but that it merely-aonatl-
tubs an asset to be rendered by the individual stookholders in
his assessments, if in raot it was on hand as of January 1, either
as a oredlt in his favor in the bank, or by having aotually been
rsoelved by suoh stookholdar and In his hsnds on January 1.
Very truly your6
ATTORNEYGENRRAL OF TEXAS