OFFICE OF THE ATI’ORNEY GENERAL OF TEXAS
AUSTIN
Boa. Oborgb H. Shb r;brd
O~tFdler Of Pub P10 AOo3ttil
Auatin, Tmxas
Oplaioa lfo. O-3012
Tour lattar ss Dbo requbrtr th* opinioa
of bhl8 dbpertmbat artruation on4
8~pllabblon of the
eaundod br Aotr 19&
ootlltlod am Artiol
ion approve4 b the Soeuri-
00 bho px'ovifi 1 cm@ of the
of 1935, four oubridiary
diarolvbd aad frwuforred
all of the ltink
oomp8nj. Thlr
ho bus inuoor
orated br tba
lo b mb o 31,
r
i" *ll of luoh
b\sr;lnesr 10
levied by
You wek our 6drIo0 68 ta whothe? 6ho sow 0orpor6tlon
la aubjoot to tbo tax @m80& by Ad.10 7060, V. A. C. a.,
oalouleted on the baa16 et the aulunt ot buain668 4660 by ita
predesesaora in mvn0rahlpor whothor it is aubjo0t only to the
tex imposed by Artlol0 7073, R. 0. 8.
Artiole 7060, V. A. C. J., reeda, In part, 06 follovmr
-tiob indItIdu61,octapa6y,oorporatlon,OP a6oooIatIon
oming, oporetla(r, unaql6g, 0P 00ntrollIn(l66y earn, rloo-
trio l&ght, 010atrIo pOuOrr or rater works, or w6t.r aad
light plant, loo6tcb wlthln lw Ia00rporat0dtown or olty
In t&la St6to, 0M used for 1006l 66l0 and dI6trIbutIonIn
6614 town or alty, and oh6rSIag for luoh g e a l
r l@otrIo
lIghta, l1ootr10 p0u.r or lmtor, ah611 uko Qu6rtor4, on
the iirat day of January, April, J\ilr and Ootoberof laoh
year, a report to 8& Cmuptrollrrtmlor oath of tha lndl-
riduel, or or the pr0eIdoat treamuer, cw rsp0rIat0ndont
of arch oomp6ay or oorporadon, or eaaooi6tIoa ahariq the
&roar nount rooeirod from auoh buainoaa aono in laoh anoh
Thm ltatuto turthar #rorId66 that tha tax thrtrin
lovied aball be a oertain perooatr~4 of the @a66 raOOipt6
8hown by auoh report6en& provide8 tht ths tax oh611 be gm3-
uat6d 6ooordImg to the populatioa of th@ aitIO6 Ia uhlah the
buolnaaa la oonduotbd. You will noto that the kei616tur6 h6a
06ll6d thla 66 oooup6tIootax. Th6 Bupr6a6 Court baa hold It
to be au6h a tax. UtilltlorRatwl @aa 00. v. Statr, 136 S. 1.
(26) 1153. In that oaao the oourt aeldr
“The ~lo objrot or this rtatuto theIa~lms or 6n
au at on tax against those who ongage In 6 burlno o
Q.fi6ea in th6 lt8:ute “,6 aubjeot 66ttfr
In rcap0at to wbleh the tax 16 impoa;d is a bualaeaa bear-
lag tht oheraaterlatlo mark8 apoaifI0d la the atatuta."
Eon. Qwigc 11. %h*paard, pago 3
Jfaaemarlly,b@forb tha tu ean be oaluul&ted U&T
tha prorlaIoaaot Artlole7060, thuo wt have boon aoae ro-
aolpta from bus:neaa aa0 during the preooalng qurrtu. The
statute thua pnauppoaea the exlatonoo nnd opemtlos of tho
bualnasa boforc 106 terma boooma offootlvo. To rem&y this
aituatlon tha Lagial.atwe enaotd Art1018 7073, R. C. S.,
arbitrerilr fixing a tax o? $)O.OO upon the oponto#a ot bual-
nbawa whloh wsra bo&m ld punuod on or af8.r t&o llret $ay
of any quartarlr tax peyumt data, ior tha prIrllo#o of
Ing in luab buainoaa far the first guertor &arlu whlah 8 T- ‘h
baalneaa *rlsta. Art1018 7079, R. C. &., reeds 86 followor
*If ma y
ina ivik ua o o l,
mp a a ly,
orporrtloa,firm or
aarooiatloa, in this ahaptor rurtioned, aba3.1b&a antl
ongase la say bualn~aa for whloh thoro is mn oorupatioa
tas horala lmpcwti, thorn, ana in all lwh oaaoa, the
amountof mush tax fer arid boglanlag quarter ahall bo and
is hereby fired lt the sum of ?%?ty dollera, payable to
t&a Stat0 Treaaursrla dvaaoog bu8 for the sort lwo o o d-
In& qurter, and lilt other luo o o a 6Ia g
qwctua, tho tu
ohall bo dotwalnaa br npwta te *ho Oomptmllor of tho
buaInoaa for the pmodlag quartet, or part thoroof, u
horain othotiao ln this ehapller proriddf 8aa report*and
-to of such tax shall be amlo atrbjbat to alL e&her
provlaioaaof this 8hapter.w
In aenaldorlng tbia pneatioa it 1~ noaoaauy to boar
In rind the twt that cm abrupatloa lioowe nay k trautortwl
by the llaonuo. Art. 7059, R. e. %.a t&at mpna wad In
a bualaoas roqtirad by the 1-a of this strtr to pay a tax
upon gross r*aoIptr1s require& 8s have a pumlt to
auoh bualnasa, Iarued by the %eo?etwy of Btato, Art.
R. c. 5.; 8nd tbst the applloetloafor auoh a per&t mat &mu
~that the applioant h*a pai6 the @roam ro8olptataxu puorlbwl
Withoriaaa appllaant to la&w$e la thr bualnerruntilDeooabor
)lat or the yeu in wbiab it is iarued.
k quentlon airilar to tht here us&r oonaidoration
ma dlsouaaod in an A4~orney Qoaoral*aopl~ion under daba o?
tievmmber 16, 1915. That able and manfully ooaaI&rroa QpiRiOU
uaa wrlttm bJr PaaiatlatAttorruy QuWd 61 W. Tarlop lad lp-
proved by AttorneyObaeral B. P. Looser. l%o quc)atlon *bar4
treated was whether Artiele 7385, 8. C. 8. 1911, whleh la our
present Art1010 7073, R. C. 8., -8 appllosble to on0 who pur-
ohaaad a goln(g burrineaa prior to the tax paymat date, auah
business bring one whleh was requlrod to pay an ooeupation tax
baaed on &rose meal pta. In holding that the meld rrticle was
not spplloabls, the Attorney fmaeral arid:
*f.eall tams upon grora xeaelpta mder the ruiow
l~bdlrlslona or tbla Xot are baaad upon the amaunt of
bualneae done for the preceding quarter, it ia madteat
thet at the bqglnnin(l of the business, there beln$ no
$roaa reoelpta ?or the preoedlng quarter,no tax eOUld
be baaed thereon and as auoh tax le Sor the pririlage or
ongaging In the oeoupatlon to +th elaaauUng guuter it
neeeaserily followed that them maat bo fired w statute
8080 arbitrary amount to ba pa1d.u a p?ivix~e ror angag-
i116In the oaoupatfon for th@ baelnningquarter.
I. . .
“The tax baaed upon roaa rooelptafor the preoodlng
quarter, being an oaeupat f on tax, mad the faot that the
beglaning quarter tu of titty boll&n la lwlod a# an
arbitrary amount for the ruaoa there wera rpogross re-
oolptato ion, t&e baa18 for much tax for e preob~io(
quarter,we tbiaik would be ruffleloat pouada for a ml*
that a purahuer of a bualner8 upoa rhieh the tex has be*a
mid would rrueeowd to the r&&t: oi t’:
the buslnras without tbs payson oi
Howaver, we fhd in Artlole ?jbb P S
N. c. s. 1925) dealing with the ioe;pai
Artlole 7355 (Art. 7047, H. C. 9. 1925) tha authority to
oonrey the unexp!ired portion ot an oecupatioa lle~aae, . . .
“Al-tiol. 7365 (Art. 7056, R. c. s., 1925) authorirea
the uaigtme or purebaser of an uaexplred oeoupafloa lioeaae
to pursue auoh ooolppttlon upon the eon4ltlon thenin MB&.
UT&w (ass meipt tax levied br tha artfelea of ltatuto
under Uaeuaalon, being an oeoujnUvn tax, the SWOelpt iSSU@d
upm th6 payaent thereof, rbfl* not In ths fora ot a lleesiae,
la in raet the authority and lloeaae mate4 by tha etate to
pwsw the oaoupatlon Sor the auooesdin(ll unrtor. While the
two artlolw last amad WIN enaotrd ln 1 8 85, long prior to
Xw. Oeorgo H. Sheppard, page 5
the enrotmnt of the
gross rooolpttax 8tatuta yet a8
the ehanotrr ot taxationunder the gross rueipt law la
the same as thet ;IL1dorwhat is known as the oeoupatiofl
tax statute, m tblnk the twa la tter lrtlel~a quotadharr
applleatlon aad that the right aequlml by the pa-at
o? the @roar reoeipt tu la tmaa?wable w&dewthese
lrtlel*a.
80 think the aboro qwtatloa rorrwtly intorpmta
tha lktuto bon under eonslderatloa. That statute,i&t. 7073,
a. 0. 8. h a so tb unuunUed lino e tkn & a t*
o fth a otp lnb a .
10 pwaehe 84 ruaoa why the saw rule slwuld a00 apply to
the tupayor who pwaJuau e bualnoaarubjaot k, the groao
xwaipta tu on the flnt day of tbo tu quarter”, that ueuld
apply if tb purohaaok amb on my ether Qy dually the
quartor.
It la true Wet in tba eau under roasldwatloa tlm
taxpayerlaqulrwl m p~lrileaato traaaaot buaiaoaaduring w
part of the qunrter. Its pr~d~aaaaora ha6 llroaby ruad up the
privllogew,aiohthey had pali ior* ~Tho only dlr?oronoe in the
two eases fa that ln tha ease then kforo the Attornw ~aoral
the taxpayor’a protlueaaora, by dolag bwlaerr far a art of the
quartor,had laid the bash of taxation, rhfIO hwe
the taxpayer*8
=3= pm ueaaw8, by doing bualruaa twhout the
quarterbefore the taxwing data, ham +mld thr basis
for lrrlrla@ at the oorreet ammat of pdrllege of
dolu bwlneaa for the rwoobdlag qmrter.
Am polated out in the opinion fro% whloh we have
quote5 the arbltarX fi6IWO of rwty dollars
fa lwfod for
the pdrllwe of ring in 1.n bualnesa because tbara would
otheruiae “p a for ooQlo:,
bo no bsa 4-f a ioa a? the tax, there bqlng
80 gram8 reeelpto upon whioh to oalouls8c the tex. %a& la
not the ease lam. The gross rboelpta of ths bualaerr for the
entire preceding gusrter are kmwo. Tbop conatltuta the moaauro
iron wblob tlw t&x 18 to be oaleulated.
Your lttmtion is dlruotrd to the raot t&q&&rtlola
7073 l8 dlrwtod to O&ma@taxpayerswho “ahall be- eaglgr
in say buaineaa . . . OR or after the ba@xmlng dat, &‘~‘tho
qwrtar for which aaid tax la lapomd, thm and in all muoh
eaau, . . 4 so that if the opinion0s httonaeranord boner
b oomot as to tbo levy of the tax wham tbr bualnaaa was
r tb8 bagiaaln(l
p u M h a 4 .b l day of the quuter for whleh the
tax la 131p084 , it must,
37 for the aaab rearnow, be aonsot as
to t& lety of the tax Hera the buainraa wan pwehaaed s
the bo&u!ltq &Ry 0s the quatiw.
pkruver, we would poinO out that on8 who pwehaaea
aa aotabl1aBod bwtnekm, wh;rh la sub eet to the pwoiolona of
ArtSolo7060, V. h. 0. 9.. do** not in any oven*, beeem aub-
Jeac to the pawvlaiona 0s Artlao 7673, si.c. 8. This Aa true
bemum he dtna not “bagla aad engage la . . . say buaI~eaa.r
It may be that he has never %a(r&ge$ :a* the taxed bualnua
befow . r? su, and if, aftor
the Opuatba of the buria488
The pumhaaar of an eatabliahcd
aay buriaeaa* though he nay thsroa?trr cn@qe la thrt bu&a~,
and pwauo that oeeupatiqm.
To lbqla* warm aisply WtB) start* or “to lnitl~to”.
To be&n a bwtiesa, as wed in thh statute, we think mana
‘to lnltlate* or “to atr,rV that buakmaa. Tu vmgaao ian the
business oaanaOw a onatinulty or Op+IWl+im or mrarrlt of the
bwinoas. I% iawe wlthl~ tbr tcrw o? hrtiole !Q73, R. eJ.%. ,
the taxpayer muat both *begin an3 emgage ia* tha bu&tea6.
The raot that ahe tarpyear never kwforr *eri&?upl law the bwlneae,
or that, as ia this eaae,‘thotaxpayor never before ULated, 18
beaidb tbr p&at. When he aoqatrer’an established going bual-
mea, he doea not nbeglnmthat bualnssa. It has airu4y bmoa
initiated aad will oonttnw to bs a going ao5eera until 59. auau
to be a buainasa. onott begus, it mm never again be the aubjut
0s lnltlatory 8top8. It oan barb oaly one b~&knln~.
we therefore advi8e rma that Artlole 7073, R. 0. $.,
la not lpplleable to tbe purahamr of e &~inq buuine88, rhloh
Is 8ubJoeb to the provi8lon8 oi rstlole 7060, v. A. C. S., but
tDet the t*x rhould be oaloulsted on tha bar38 of the grosr
reoelptn of that bualne88 fros bu8ine88 done during the pre-
obding quartor, in 8ooor5m1oa with the protislanrci *al4
Mtiole 7060.
iohile under our view oi thlu mttet, the iaot l8
imaaterial,it 18 lntere8tltwto noto that tho record sub-
mlttrd to w, thou@ lt r&loot8 a ohao~a in oorporetoareal-
srtloa end name8 doe8 not lodieatr that cmy ohange in t&o
ultiante owner& or control of tJm bwslnerr~ involved has
tmken phh8c. This were other-
being trub, even Lt the rctntute
wlw lpplloable w think t&at thlr taxp or oould not beh
8bvant;yo the p~orlrloa8of Artiale37 73 53. 0. 9,. buQ
or
would be eubjoot to the 9rovlalal8of Artloie7060, V~.A.O.tX.,
liaoo it uouUI be wmtlaulag tha opentlon of ths mesa bu+i-
aosueu under a differentINU but for t&w ultimate banriitof
tho maae iadlvidrul8.
ft hi boea oelle4 to our 8ttmatfos-i that two opimioaa
of r0rwr Attoraedy8 fkeneral nro in ap teat oonfllot
wlibh thi8
dabed khy 8 1924 br &essbd 80 Han. Len A.
Oam 18
~ti!?oaptr~llu and biga; by i 3 8mglor Alui8%asS
Att&by Geaerml. *The other f8 da& jobmary 1.5,1.928, ad-
br08rd to XL% 8. a. Tomll, Oomptrollorof Publfo AooouQt8,
8lpr.d bf Pwl D. Pago, Jr.. ksdetant Aittoraey Qmonl ead
ajgsrovml by CLmda Pollax'& kttoraer fba These opialoms,
larrolaras th& datomentr therrla oontdm'zp'ire in ooafllot
with thlc~opinion,are hereby es~roorly ofonrled.
Trustlag that tha above tully anrrwers tour lapuizy,
w are
Your0 wry truly
ATTCWEY O~2AL O’F TEMS