OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Q-C.MANN
m.ieuuv.-
Ronorabla Cleorgox. Sheppard, pa&r P
aal oompaay, oorpontion of esroaiation,
at the tir oi makiag se14 raport for an7
saoh lnoorporatrdtown or olty ot aoro than
ow thousand (1,000) inhabitanteend lerr
than two thoumAn rite huahrod (6,600) la-
habitantr, aooordfn& to the la8t Tadoral
cOlA8U8next preoedlng th@ filing of reia
report, #hall pe to the Trrartwer of thir
@tuta 8n oooupet Ion tax for the quarter br-
ginnl~ on 8aid date lquel to forty-four
huaaraathr (,44) or one (1) per aent 0r
8tIidgo88 reOOipt8, 88 8hOwa by 88ia rO-
port1 eta.@
"%lOr0 I8 nOT 801b t0 the OODlW.%3Twlthln
the lnoorporated town8 a liqaeilsd petrolown gns.
Thl8.ga8, a8 a rule, 18 aellrared to,thr aon-
8umer In liquid form and in ordrr to ntaln it8
1iqUid 8t8t8, it aU8t be k8pt WidOr high prbr-
8ur8 but when mleaaed iOr the barnar tip, it
tWI.I8to 8 gar vapor. There era lnstanoerwhere
l tank 18 lnrtalledon a lot from wh lo h l nun-
her of auotomerr are taken ean of by the ga8
‘h
brfng plprd to thr ho3148)in thlr oaae, a8 In
the inaitiaual0880 e8 80011. a8 the praaenm
ir rolaasrd at th8 task the gar rapor 18 fox-reed
and piped from hOU8. to house. "
tilea tall QI if the gros8 raoalpt8 tax,
unaer tbo above rrtirlo, wIL1 a ply toruoh ralrr
wham ?a848within the laoorpora%od tona8,*
ft IQB~be 88on that the artiole JOU quote la
rour letter oontainr two rrquirementrbetorr an lndlrld-
ual beam08 liable for thr tax dilOU8S@d therein. tn
the flrrt plaoo, In nlation M the question8 asked,
the lnalrlauelmuat operato within aa lnoorporatodolt
-any gar p1ant.R Also thr same must be umd *ior looaI
la10 snd d~rtrlbutloaof gall.* The tax is based upon
the gros8 amount reosived from the burlns88 dono in ths
papant of oharger for thr galra fou havs iurairhtipr
with the lddltlOn81 iaOt8 that the llguld la8 in 'qtI@S-
tlon 18 a aomponeat p8rt or ~orltrtito of natural aa8
a.hiOhir liquefied by pressure and teaperaturo. In itr
natural 8tate it i8 a gba. It la ml6 to the oonsuaer
.
,*.
786
Honarablr Ceorgo fl.Shepperd, pago 8
either e8 l liquid or a8 a ear* Prior to it8 ocummp-
tion it roturnr to it0 @S.OU@ state. rho fir8t quea-
tlon arlroo a8 to whet&m ot not tho ooeeodltf you in-
quire tbaut 18 gas titbln t& waning 0r the above quoted
8 ttItUt8, YOU hW 6aVi8Od U8 that tk OCWtiit~ i@
3itih8r a prOpQll8 Or 8 bltM0,
Fro~ano 18 dofinod 8)f XOb8t6r a8 fOllOW8:
.
-ithOr sf tu;oiaowrio, mhi6bh, gase-
oaa bydrooarbaona, Cd Hlg, of the iwthna rerier;
l c l .-
20th 0f the abOV@ dbfinftioo6 MOO@LO th# 00~1
aoalty to bc a fe.?ecusI%b8t.WIOO. It i8 our uder6%bllbg
that tD6 E0;;:O i8 li~USfi3d b'yp.36~r a&d taXp.iIMXI%
ror pu~oaee or trene,norting and handling. fn this oon-
motion tts Amtic Couxt af Civil A~;,tialrin the oasa of
bALLA CA6 CO?.PAHYv. 8TATE 861 3,?i,lCa!J -wit oi error
reruned by ttieSoprem Ccur4, nt.;tob in ooh\eotlon with
thr taxing rtatute tuxIsr OOn6id8r6aiOiI hero, 80 follrmst
"In iti88eaOnd &ropOUibi0n,bawd upon NJ-
0f@!Snt8 7 Ma ii, app8lht 00~t(d?U thGt tL'.O
t6nS ‘&18’ 83 U36a b th0 #mUtO 388111 Otiy aE
a8 end doen not lnolude nature1 aor*
era Oar'Trust Co.,
(Vndrr8aorlng:
ourr)
T!UUI the court or Civil Appsela ladioctes that
thr tam 998' i8 to be broad17 aanetruea a8 to ~~37typ
of $bS.
20 believe that the 16llFWg8 Or the to% 3tltUtU
xonorablb (korgo 8. 8hqqUd, pago 4
la ~ur8~lOIl is bror4 waough to Inuludo butaaa 884 pro-
pan0 pm whothrr a014 in llquld or grr*ow Itate, Tbm
A&a In theensrgonoyolaasa of th@ mboro wotsd
Aat, the teglrleturo Hated II follwat
*ZSoo, 6, The fret tha% la the pert few -
nekr hundreds of lives ban be lort tm
oauser rggarentl dua to eroap G& or ad-
latoa w rxp10111 ~a#) rad that mserou8 luoh
,.,
‘788
Xonorablr Qoorga H. Sheppard, Pa@ I;
a nlmer g e na ~+ l * .I
It la our opinion aa anauer to the rlr8t quaa-
tioa that llquld p&roleun gas la gaa within thr maanlng
of Ar6lola 9060 a slmeaaaa b yx o ur B
r ill8,Aotr or the
Forty-aarenth Laglrlature, 19U.
Ia answer to thr rrooad quo&ion, ua are adtla-
ed that the lndltlhala or 00 oration8 that a&l thir
transport thr nnm ‘ls th a r by maana ot plpa llna
mana sf fsuoka oarr~l.n& tamJt8 oi tlm
atate, The quaatlon lrlaa# aa to wheth-
er the oparatfon OS aueh wthod of transportationputs
the Individual or oorporatfoa within thr oate6orT ot op-
arating a “gas plant= aa that term is used In Artlola
7060, aupra. The Auatln Oourt oi Olril Appaala in the
aaao of WPILITI75SNAlURAL CA3 00. ve STATIC,118 S.W. (24)
299, in dloouealng the definitionof the term “gas plant”
within tha meaning of Artlale 9060, rtated as folloua1
“The 801s oontantlon of appellant ir W&at
It la not a ‘gar hat@ within the maan
t&a term as used % the atatuta, baoauae 9 t only
owaa and operates- a da& ~~1 line anawla~- .-- ~-’
the olty oi Vlo-
t;;,;o only one ouatomer withIii-.
We have raaohetfthe oonolualonthat when
tha aixdute in oonatmad ?ron its fopr oornara
and ln the light of tha purpoaa of its enaotmnt,
it oammot be so liaitabr
*It la true the atotuta designates the
tax as *en oooupatlon tar’, but It alearlr ap-
paara from the language usad that the tar la
an rxolss laid on bualneaaea 'owning,operatlalt
zr,y;finnor ooatroll.ln(tany gar I)* 1 plant
any lmeorporatedtown or a tr l u
for looal sale and dlatrlbutloa * e + oi a.*
Grog No, 1 011 00 f* Sheppard,Tat. Urv* -
App., 89 8.W. (e*)%fi1, 0-r rei,{ Trustwa
of Oook’a Nat&e 1. Sheppami, Ter. Oivr Qp.,
89 3.~. (2d) 1026, error raf., affirmed bytho
789
Eonorebla Osor@ lL Shappard, Page d
in ray manner tha km *&a8 ~laa$* as indlaatlro
of the buai.naaa sought to ba taxad. Paarloaa
“‘In S BOW. Law Dlot., Rawla~a Third Ravl-
elan Q. ?W9, the word or form 1 lantl la da-
fined as balag ‘the furalturaa aai toolr aeees-
ear to aarrf on any trada or xnaohanloal bualneaa.~
l
A hIghlq oamplax SC llaborata SYStSm la not aaoaI-
aaq, but tha moat .impypm wharaby the baa-
lnoaa of lalllng and d a 1 ding 668 to looal
~trada wlthin laaorporataa oltr or tow31will
aufrloo n&or “y;
t a ta x ingltat~ta q ak~aa plaat.
Under this ml8 the pip lina SyStM and a parataa
of appallant looataa in tha oft7 of tlotpr s a, *
whrraby it aalla and d811?8~4 gas to lull trade,
aonatita$as its gas plant br aad thrcugh whlah
it aarrlea on ltr &as bualaaaa In said olty, ana
a~~,,“. tha bualaaar intended to ba temd br tha
.
“lb**.
Tha 8our$ further stated that tha aala bl th@
790
%onorsblr oeorgr H. Sheppard, Page T
Vtllltler ZJatonl Oar Gon~q by pip, ISno to 0n.l~OM
oustonnr ln the olty of Yiotoria amounted to a dirtrlbu-
tlon of the gal in raid oltf within th8 meaning of tk8
tax rtatuto. The 00nn~la010t1
0f bppeLil8rWer804 th8
Auotin Oourt O? 01~11 AppmlD in an 0pin10n mpOrfed in
12S 8.8. (26) 115% The Oomzairrion aid not qnunl with
the definition of *gaI plant* stated by the Auotlu Oaurt
of 09.~11hpgealr, but the Oommiralon of Appeal8 held that
the 8alr to a 8ingle ouetomer ia ths olty of viatoria did
not amowit to W8e for looal asle lb.dl8tributlonm of
gas l.nthe city 58 the statute contemplated. The Oommir-
oion of Appsclls aonoluder as fo~ow81
REut oonsfderod in the light of the prorl-
#ions of tho statute, ar a whole,‘wo have no doubt
that the slmplo fact that h del$rury of gas is
made In the olty, by meens of enid pipe llna to
a alngle oustomor and to noboQ else, wea not ln-
tended by the Legislature to ke oomprehendedby
the term qdlstrlbutlonSa8 1.~66. This term a8
a6eQ doer BOt men the tranRfer, Of the ~0884!38iOn
of gas, by mean8 of the plpa line, to a rlnglo
purohasor whefl 8uoh pwoilauer is the only oua-
tomer to whom the gas oomyany sells ear La the
alty. It -3nr the tranofer 0r p038ee0ion 0i
.gea ti rarioua individuals or OOnOerB~ in th .
oity.,~An7 other ooxattruotlon of the term would,
In our opinion, involvo a 6.uprrtTjre Srom th*
leglulntim Intent. SiEoqp therefore,the ~130.
of ‘ear-works,’in c olty ,~rto+n in thlr State,
for the distribctlon ci giils in Doid oitr of tom
is, by rtetute, ;nrdean, essential oharaotarlrtle
of the bueiners tax&l, it followa that the bur-
lneeo $n which tho plaintiff in error i8 engagrl,
80 dlmO88d by the IUdlS,%te& ia#tE, 1s not
aubjact to the trx nhtoh thi8 Statute prOvib8~"
It ir tb.0oginlon cf this Eepartmant in line
with the above quoted oa8e8 that an7 lndlildual or oorpor-
ation srlllng or aistributln~ liquid petrolau gss to more
than one oonhxzer in ay Loorgoratea alty rithti the pop-
by
ulctiou brcroketestetec?i,n Artlole 7000, $9 ameesnded
Honorablr OeOrga IL Shapperi, P8ge 8
Houe6 Bill 0 Aatr of thr Yorty-roronth tsglrlaturo
1941, would k aubjrot to bha gross rroolptr tar 1erf.d
Yours vary truly
Untitled Texas Attorney General Opinion
Combined Opinion