Hon. Geo. H. Sheppard    Opinion No. o-230~A
Comptroller of Public    Re: Reconsideration of opinion No.
  accounts               O-2304. An individual who owns tank
State of Texas           cars in which he transports his own
Austin, Texas            gasoline and who does not lease,
                         rent or charge mileage for said cars
                         is not required to make the reports
                         or pay the occupation tax under Art.
Dear Sir:                7062.
          This is in answer-to your request for a reconsidera-
tion by us of our opinion No. O-2304 concerning the payment of
the occupation tax by private owners of tank cars who receive
mileage payments from railroads for the use of such cars0
          Me have carefully studied your request for a reeon-
sideration of our opinion No. O-2304 in the light of the author-
ities quoted by you in your said request.
          Article 7062 of the Revised Civil Statutes of Texas
reads as follows:
          “Lath individual, company, corporation or associa-
     tion, residing without this State, or incorporated under
     the laws of any other state or territory, or nation, and
     owning stock cars, refrigerator and fruit cars of any
     kind, t,ankcars of anv kind coal cars of any kind, furni-
     ture cars or common box car: and flat cars, and leasin=,
     renting or charm    mileape for the use of such cars within
     the State of Texag, shall make quarterly, on the first days
     of January, April, July and October of each year, and re-
     port to the Comptroller under oath of the individual or of
     the president, treasurer or superintendent of such company,
     corporation or association, showing the amount of gross
     receipts from such rentals, or mileage, or from such other
     sources of revenue received from,business done within this
     State, during the quarter next preceding. Said individuals,
     companies and corporations, and associations, at the time
     of making said report, shall pay to the Treasurer of this
     State an occupation tax for the quarter beginning on said
     date equal to three per cent of said gross receipts as shown
     by said report.” (Underscoring ours)
Hon. Georgei'H&She.&&d, page 2


          It is our opinion that private owners of tank cars
who ship their own commodities in said tank cars and receive
mileage payments from railroads for the use of the cars are
not "charging mileage" and therefore are not subdect to~the
tax described under Article 7062.
          In discussing this article of our law in our opinion
No. O-2304, we stated as follows:

          "In a second letter on this question you gave us
     additional facts as followst
          "'The owner of a tank car loads said car at
     Sweetwater, Texas, with gasoline and makes out a bill
     of lading on same for delivery to himself at Fort
     Worth, Texas, the Texas and Pacific Railway Company
     moving said car as per bill of lading. The Texas and
     Pacific Railway Company then presents freight bill at
     the destination under the rates and terms of regularly
     published tariffs of the Interstate Commerce Commission.
          "'litregular intervals, the Texas and Pacific Rail-
     way Company, under regularly published tariffs of the
     Interstate Commerce Commission, pays to the owner of
     said tank car the equivalent of l&? a mile for each mile
     which said car traveled loaded on lines of said railway.'
          "As we interpret the facts, these tank cars are
     used to transport only the owner's property. The owner
     loads the car at Sweetwater and the railroad company
     moves the loaded car to Fort Worth, where the owner pays
     the freight on the load at the same rate as if the prop-
     erty had been transported in the railway company's own
     car.   At regular intervals the railway company pays the
     owner of these cars l&? a mile for each mile it was used,
     that is, traveled, while loaded.
          II
           . . .
          "It will be noticed that the part of the statute
     with which we are concerned says that 'each individual
     . . + owning . . . tank cars of any kind . . . and leas-
     ing, renting or charging mileage for the use of such
     cars within the State of Texas' shall make the required
     reports and pay the prescribed occupation tax. Under the
     facts that you have given us the individual owns tank
     cars. But, is he engaged in 'leasing, renting or charg-
     ing mileage for the use of such cars'? We think the an-
     swer is 'No'.
Hon. Geo. H. Sheppard, page 3


         "It is true that the owner of the cars is paid a
    sum of money by the railway company that transports the
    cars at a rate of so much per mile while loaded; but,
    we do not believe this is an arrangement by which it can
    be considered that the owner is leasing or renting the
    cars to the railway company. Nor do we consider that
    the owner is charging mileage for the use of the cars.
    What it amounts to is this: The individual in question
    furnishes his own cars to haul his own property, and of
    course he is entitled to pay a less transportation charge
    to the railway than he would be if the railway furnished
    the cars; and instead of paying a smaller freight rate,
    the individual in this case pays the same rate that he
    would pay if the railway furnished the cars and the rail-
    way in turn hands him back l&z+per mile.
         "If the railway was allowed to haul other people's
    merchandise in this car-owner's cars, and said car-owner
    was paid l&? per mile by the railway for so using the cars
    that would constitute 'leasing, renting or charging mileage
    for the use of such cars'; but, we understand that these
    cars are used only to haul the car-owner's property.
         "This statute was apparently intended to apply to car
    owners who leased and rented their cars to others or turned
    their cars over to other persons and charged mileage there-
    for! for such other persons to haul their (said other per-
    son s) merchandise or haul merchandise for hire as a common
    carrier. We do not believe it was intended by the legisla-
    ture that this statute apply to cars used exclusively for
    hauling the car owner's own property."
          It is our judgment that our opinion No. O-2304 correctly
stated the law applicable to the fact situation stated by you,
and we therefore readopt and affirm said opinion.
~APPROVEDJUN 3, 1943                  Yours very truly
/s/ Grover Sellers                    ATTORNEY GENERAL OF TEXAS
FIRST ASSISTANT ATTORNEY GENERAL      By /s/ Geo. Pi Blackburn
                                      Geo. P. Blackburn,
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