T~ICATTOIRNEY GENERAL
OF TEleLAS
February18, 1939
HonorableHomer L. Moss
CountyAttorney
WheelerCounty
Wheeler,Texas
Dear Sir: OpinionNo. 0-lg0
pe: School'spaymentof ,occupation
tax for ormeting skatingrink
and theater -Whether person
principallyengagedas farmer
is liablefor paymentof
occupationtax for occasionally
acting as auctioneer
We are in receiptof your letterof recent date in which you request
an opinionfrom this Department. The pertinentportionsof your
letterbeing as follows:
"First,we are interestedin the problemof taxinga
skatingrink, under the followingconditions:
*TheWheeler IndependentSchool Districtowns and
operatesiu connectionwith its athleticprogram,a
gymnasiumupon its campus,which togetherwith all
equipmentis schoolproperty. Schoolpatronsand
other childrenof Wheelerhave latelypurchasedan
adeauatesupply of skates and accessmies.I understand
that is is agreed that these shall be the propertyof
the school athletic association. It seems that a
skatingrink is being sponsoxedbythe school or
athleticassociationin connectionwith which the
gymnasiumand its floor is being used. A small fee is
chargedto those desiringto pursue the recreationof
skating,during scheduledhours of week nights. The
privilegeis grantedto studentsand the generalpublic
alike and the buildingis open to the public. Any one
desiringto skate !my do so upon paymentof the
desired-feeand may then pursue the sport with skates
furnishedbyethe housefor asoheduled timeLeach
evening~whanthe Gym. 19 open'tothe pastime,-A ~fee
entitlesthe participantto~enjoy-the.pastime'for a
soheduled.,timedqipg the particulaxJevenlng .ir.which
he pays. ,Ifhe or she desiresto skate on the followinr
or anothernight anotherfee is charged. The funds derived
Hon. Homer L. Moss, February18, 1939, Page 2 O-190
from these fees~oradmissionsto the floor are used
at presentto pay for the skatesand expensesof
operatingthe hall for the purposesabove named.When
the skatesare paid for, it is the intentionof the
sponsors,that is, the athleticassociationto place all
profitsabove expensesin the athleticfuxd, to be used
for basketballand other athleticexpensesjust as
revenuederivedfrom admissionsto basket ball games or
other athleticsportswould be used. Understand,.the
partieswho furnishedthe money to make the initial
paymenton the skateswill be reimbursed."
1. Your questionconcerningthe above quoted portionof your letter
is as follows: Is the skatingrink being operatedfor profit,and
as such is the school liablefor paymentof occupationtax under
the provisionsof Article 7047, Section 341
2. In the next questionyou inquireas to whether or not a rural
high schooloperatinga weekly pictureshow on its campusand charging
admissionfrom the generalpublicwould be liablefor the paymentof an
occupationtax?
3. In the next questionyou inquire as to whether or not a farmerwho
occasionallyacts as an auctioneerin the sale of farm productswould
be liablefor the paymentof an occupationtax?
The pertinentportionsof your letter in connectionuith the third
questionbeing as follows:
qe have one or more men in the countywho are principally
farmers,but hold themselvesout as auctioneersin that
they cry sales of farm outfitsin differentparts of the
county duringthe early part of each year, sometimes
auctioninglivestockor hogs along. By farm outfits,I
mean a situationwhere a farmer sells out all feed on hand
all implementssuppliesand livestockand the like. These
local auctioneerschargea small profitbut engage in the
crying of perhapsa dozen or less sales per year. Such
is not their main occupationor means of livelihood."
In answeringquestionNo. 1 in your inquirywe deem it necessary
to first discussthe phrase,or term, ' used for profit"as used in
Article 7047, Sec. 34, R. C S. of Texas. The statutedoes not attempt
to definenor limit the meaningof said phrase or term, and since the
act does not define it, it must be given the meaning ordinarily
attributedto the phrase.
. .
Hon. Homar L. Moss, February18, 1939,Page 3 0-W
Profit is usuallyregardedas "the gain made on any businessor investment
when both the receiptsand the paymantsare takan into consideration."
6 Words & Phrases,First Series,p. 5659.
I direct your attentionto the case of HoustonPelt & TerminalRailway
Companyvs. Clarke,122 S. W. (2d) 356,which amply definesand
discussesthe word *profit". From the decis+m in the above case,
togetherwith the definitionabove stated from Words & Phrases,we
are of the opinionand you are accordinglyadvisedthat the
skatingrink in questionis being operatedfor profit.
Next we will discussthe questionof whether the school is engagingin
the "occupation"of operatinga skatingrink. In discussingthis phase
of the question,wense principallythreesoningand languageas
submittedin your brief, whichis to the ,effecCthat the school,as set
out in your inquiry,is not principallyin the businessof operatinga
skatingrink, yet such an institution,it seems could pursue a taxable
occupationas an auxiliarymeans of obtsiniagrevenue. In other words,
if the recreationoperatedin this instanceis otherwisetaxable,I:.
hardlybelievethat the fact that theinstitutionis operatedfor
educationalpurposeswould constitutean exemption.For example, the
operatingof a campusstore, or the operationof a public theaterto
which the generalpublicwould be invited,would be engagingin an
occupationother than that of the operationof a publicschool.
It is, therefore,the opinionof this D&rtment,~and you are accordingly
advisedthat the school,in conductingl&e operationof a &sting rink,
is so engaged in that operation,dnd inasmuchas we have held in this
opinionthat the operationis for profit,the school in such operation
would be subjectto the paymentof 8n occupationtax, as is providedin
Article 7047,Sec. 34.
In answerto questionBo.*2, we are of the opinion,and you are so
advised,that a rural high school operatinga weekly pictureshow,
and chargingan admission,would be subjectto the paymentof an
occupationtax for the same reason as stated in answer to question
. No. 1.
In answer to questionNo. 3, we wi$htodirect your attentionto certain
facts in your letterwith referenceto the farmersholding themselves
out as auctioneerswhich reads, in part ss follows:
%e have one or more men in the countywho are principally
farmers,but hold themselvesout as auctioneersin that they
cry sales of farm outfitsin differentparts of the county
during the early part of each year, * * *
c .
Hon. Homer L. Moss, February18, 1939,Page 4 0-190
You will note from the above facts that the personsare holding themselves
out as auctioneers.as a part of their means of livelihood,and as such
would obviouslybe preparedto engage in that occupationwheneverthe
opportunityshouldrequire,depending,however,upon the amount of
auctioningto be done in the county. You will note further in your
letterfactswith referenceto the auctioneersreceivingprofit,
,pertinent
portionsof your letterbeing as follows:
"These local auctioneerschargea small profitbut engage
in the cryingof perhapsa dozen or less sales per year."
It is clear from the above facts that these auctioneersreceiveprofits
from the auctioning,thisbeing one of the essentialelementsof an
occupation,.We directyour attentionto the case of Tarde vs. Benseman,
31Tex. Rep. 282, in which the court,in discussingthe term "Occupation"
had the followingto say:
what is,an occupationin contemplation of the constitution
and the law? The connection&which the word 'occupation'
stands in the constitution
would seem to give some indication
of what was intendedby it. It says: 'Pursuingany occupation,
trade, or profession.'Certainlythe two latter, ' tradeor
profession,'importprofitable~pureuits."
We also direct your attentionto the case of Williamsvs. State,23 Tex.
Ct. of AppealsReps. 499, in which the court, in discussingthe defintion
of "occupation*used the followinglanguage:
"It does,notrequireeven a single sale to constitutethe
offense,for a parson may engage in the businesswithout
succeedingin it, even to the extent of one sale."
From the above facts quoted from your letter,togetherwith the decisions
cited,we are of the opinion,and you are accordinglyadvised,that such
personsholdingthemselvesas auctioneerswould be subjectto the payment
of an occupationtax as is requiredby Article7047; Section6.
Yours very truly,
APPROVED ATTORNEX GENEBALOF TEihS
s/ Gerald C. Mann
GXNERALOF TKKAS
ATl!ORN!IY s/ GeorgeP. Kirkpatrick
BY
GeorgeP. Kirkpatrick
Assistant
GPRFG/ldw
Untitled Texas Attorney General Opinion
Combined Opinion