         THE    ATTOWSET         GENERAL
                    OF   TEXAS

                   March 1, 1988




Honorable Ralph R. Wallace, III    Opinion No. JW- 865
Committee on Cultural and
   Historical Resources            Re: Authority of a county
House of Representatives           or city to grant exemp-
P. 0. Box 2910                     tions from the     hotel/
Austin, Texas 78769                motel occupancy tax to
                                   certain religious, chari-
                                   table   and   educational
                                   organizations (RQ-1294)
Dear Representative Wallace:
     Chapter 156 of the Tax Code imposes a hotel occupancy
tax, levied by the state, "on a person who, under a lease,
cohcession, permit, right of access, license, contract, or
agreement, pays for the use or possession or for the right
to the use or possession of a room or space in a hotel
costing $2 or more each day." Tax Code, 5156.051(a).
Section 156.102 of the Tax Code provides for an "excep-
tion" from the tax for a non-profit corporation or
association "organized and operated exclusively for a
religious, charitable, or educational purpose."     Chapter
352 of the Tax Code (previously codified as article
23726-8, V.T.C.S.) permits certain specified counties
likewise to impose by order or resolution of the commis-
sioners court a county hotel occupancy tax. Chapter 351
of the Tax Code (previously codified as article 12695-4.1,
V.T.C.S.) likewise    permits a municipality to impose by
ordinance a municipal hotel occupancy tax.          Neither
chapter 351 nor    chapter 352 mentions any "exception" to-
~the tax for non-profit corporations or        associations
"organized and operated exclusively for a religious,
charitable, or educational purpose." You ask:
       Do counties and home rule cities under
       [chapter 352 of the Tax Code] and [chapter
       351 of the Tax Code] have the authority to
       grant exemptions    from   the   hotel/motel
       occupancy tax to entities such as religious,
       charitable and educational organizations,
       other than the 30-day exemption in the



                           p. 4194
Honorable Ralph R. Wallace, III - Page 2 (JM-865)



       [alct, without specific language in the   law
       granting such authority?
     The "30-day exemptionItto which you refer is found in
sections 156.102, 351.002(c), and 352.002(c) of the Tax
Code, which "excepts" from the reach of the state tax, the
municipal tax, and the county tax, respectively, a person
who has the right to use or possess a room in a hotel for
at least 30 consecutive days: We do not understand you to
ask whether the aforementioned 30-day tax **exceptions"are
constitutional: accordingly, we will not address that
issue. We understand you to ask only whether a county or
a home-rule city may grant *'exceptionsqlfor religious,
charitable, or educational associations absent statutory
authority. We answer your question in the negative;
counties and home rule      cities may not grant      such
'exceptions" without specific statutory authority.
     Article VIII, section 1, of the Texas Constitution
now designates three types of taxes that the legislature
may levy: property taxes, occupation taxes, and inc;;;
taxes. Additionally, article VIII, section 17, of
Texas Constitution provides:
                                                              ?
       The specification    of the   objects   and
       subjects of taxation shall not deprive the
       Legislature of the power to require other
       subjects or objects to be taxed in such
       manner as mav     be consistent with    the
       princioles of    taxation fixed   in   this
       Constitution. (Emphasis added.)
     In American Transfer & Storaae Co. v. Bullock, 525
S.W.2d 918 (Tex. Civ. ADD. - Austin 1975, writ ref'd). a
taxpayer challenged the--constitutionality of the Limited
Sales, Excise and Use Tax Act on the ground that such
taxes are not specified in article VIII, sectionl.     The
court held that, although the types of taxes imposed by
the Limited Sales, Excise and Use Tax Act (now codified as-
Tax Code §5151.001 et sea.) are not enumerated in article
VIII, section 1, the act was not invalid by reason of such.
omission, because article VIII, section 17, specifically
provides that the specification of the subjects and
objects of taxation set forth in article VIII, section 1,
did not deprive the legislature of the power to require
other subjects or objects to be taxed in such manner as
may be consistent with the principles of taxation fixed in
the constitution. See also Guinn v. State, 551 S.W.2d 783
(Tex. Civ. App. - Austin 1977, writ ref'd n.r.e.) (uphold-    ?
ing method of requiring employer taxes imposed by article



                         p. 4195
Honorable Ralph R. Wallace, III - Page 3 (JM-865)



522123-5, V.T.C.S., which provides     for a system     of
unemployment compensation for certain specified unemployed
workers). It is pursuant, then, to article VIII, section
17, that chapters 156, 351, and 352 of the Tax Code (and
their respective predecessor statutes) were enacted.
      Among the principles of taxation fixed in        the
constitution in accordance with which such unspecified
objects or subjects of taxation may be taxed are:     that
all property must be taxed and that taxation must be equal
and uniform, Tex. Const. art. VIII, 51 and that "the
legislature reny,by general laws, exempt from taxation" a
specified list of properties, Tex. Const. art. VIII,
02 (a).   Section 2(a) also    provides that "all     laws
exempting property from taxation mentioned in this section
shall be null and void."
     In Citv of Wichita Falls v. CooDer, 170 S.W.2d 777
(Tex. Civ. App. - Ft. Worth 1943, writ ref'd), the court
overturned a city ordinance that purported to exempt from
city and county taxes $3,000 of the assessed taxable value
of residence homesteads.    At that time, article VIII,
section l-b, of the Texas Constitution exempted $3,000 of
the assessed taxable value of residence homesteads for
state ad valorem taxes only; the amendment to article
VIII, section l-b, that authorized counties, cities,
school districts, and all other political subdivisions to
grant also a $3,000 residence homestead exemption was
enacted in 1972 and took effect January 1, 1973.       The
court declared the following:
          It is clear to us that it was intended by
       the framers of our Constitution that all
       property should be subject to taxation, upon
       an equal and uniform basis for the purpose
       of defraying the governmental expense, ~j&
       the excention onlv f.such oronertv as that
       document soecificalyv exemots therefrom and
       such as the Leaislature shall, under Consti-
       tutional restrictions, bv exolicit lanouaae.
       declare to be exemot.
          It is the universal rule in this state
       that   the   Constitution   has   definitely
       provided for every form of exemption of
       property from taxation; that if an exemption
       is so made it cannot be enlarged upon either
       by the Legislature or by the courts.
          .   .   .   .




                          p. 4196
Honorable Ralph R. Wallace, III - Page 4   (~~-865)



          It is a matter of common knowledge that
       there are many taxing bodies and units in
       this State;    they   include   the  State,
       counties, municipal corporations, including
       cities and towns, water irrigation dis-
       tricts, school districts and others.
          The Constitutional provision relating to
       exemptions of homesteads from taxation (Art.
       8, Sect. l-a) is clearly limited to taxes
       for State nurooses. That is only one of the
       many taxes, or in other words, taxes for one
       of the many purposes to which all property
       including homesteads is subject. There can
       be no enlargement of that exemption so as to
       make it exempt from taxation for any purpose
       not expressly stated in the Constitution.
          Apparently defendant recognizes its duty
       to tax all property (not exempt) within its
       limits upon an equal and uniform basis for
       the purposes of raising revenue to meet its
       operating expenses, to pay interest on its
       obligations and to create a sinking fund to
       meet its bonded indebtedness at maturity.
       It therefore follows that defendant must
       levy and collect taxes against residence
       homesteads within its corporate limits for
       these purposes. The homestead is made tax-
       able by law for all purposes except for
       State purposes. (Emphasis added.)
170 S.W.Zd 777 at 780-81. See also Graham       v. Citv of
g rth Worth  75 S.W.2d 930 (Tex. Civ. App.      - Eastland
l&4, writ ;ef#d).
     Analogously, we conclude that a   home rule city or a
county lacks the authority to grant    an wexceptiont* from
the hotel occupancy     tax, absent    constitutional   and-
statutory authority to.do so.




                          p. 4197
.
    Honorable Ralph R. Wallace, III - Page 5   (JM-865)



                          SUMMARY
              Neither a county nor a home rule city
           possesses the authority to grant an "excep-
           tion" for religious, charitable, or educa-
           tional purposes from the hotel occupancy tax
           absent    constitutional    and    statutory
           authority to do so.




                                               MATTOX
                                       Attorney General of Texas
    MARY KELLER
    First Assistant Attorney General
    LOU MCCREARY
    Executive Assistant.Attorney General
    JUDGE ZOLLIE STEAKLKY
    Special Assistant Attorney General
    RICK GILPIN
    Chairman, Opinion Committee
    Prepared by Jim Moellinger
    Assistant Attorney General




                             p. 4198
