       T




                        February     20,    1952


Hon. Robert S. Calvert     ~~            Opinion   No. V-1408
Comptroller   of Public Accounts
Austin, Texas                            Re:   Applicability   of gross re-
                                               ceipts taxes to air~express
                                               revenues    received by Rail-
                                               way Express     Agency, Inc.,
Dear Mr.   Calvert:                            under the submitted facts.

             You request the opinion of this office upon the ques-
tion presented in your letter of January 23, 1952, as follows:

             “Article   7058,   V.C.S.     reads   in part as follows:

              * ‘Each individual, company, association      or :
      corporation    doing an express business    by steam rail-
      road or by water in this State shall make, quarterly,
      on the first days of January, April, July and October
      of each year, a report to the Comptroller,      under oath
      of the individual or of the president,   treasurer    or
      superintendent    of such company, association      or cor-
      poration, showing the gross amount received from
      intrastate business done within this State in the pay-
      ment of charges from express and freights,         or from
      other sources of revenues received from intrastate
      business during the quarter next preceding.’

             “I am enclosing copy of Air Express Agree-
      ment between Railway Express Agency, Inc. and the
      various air lines ~4th which they do business.

             “Please advise me if the air expres~s revenue
      received by Railway Express Agency, Inc.. under the
      terms of the agreement,   is taxable under the provi-
      sions of Article 7058, V.C.S.”

             With your opinion request you submit for our exami-
nation a contract form behveen Railway Express Agency, Ipcor-
porated, and the air line company referred to in the contract as
“Air Company, * which covers the contract or agreement between
the express  company and the air company with respect to the un-
dertaking on the part of the air company to transport by air ship-
ments of the express   company.   This contract is lengthy and
somewhat involved, but it is sufficient to say that the air company
Hon. Robert     S. Calvert,   Page   2 (V-1408)




undertakes in behalf of the express   company to perform by air
express a certain part of the transportation  of the shipments
contemplated  by the contract.  The express  shipments involved
begin and end with the express   company, the air company per-
forming the intervening transportation.

               Article   7058, V.C.S.,  tevies a gross receipts     tax
on express companies        carrying on business      *by steam railroad”
and requires     such express companies       to file h4th the State
Comptroller     on the first day of January, April, July and Octo-
ber a report “showing the gross amount received from intra-
state business     done within this State in the payment of charges
from express and freinhts,        or from other sources of revenues
received from intrastate business         during the quarter next pre-
ceding.” 1 At the same time such companies             shall pay to the
-SEItereasurer        -an occupation tax” for the succeeding      quarter
 “equal to Two and One-half       (2:s)  Per Cent of said gross re-
ceipts” as shown by the report.

             Specifically, ‘your question involves the receipts by
the express  company derived from that part of the transporta-
tion performed   by the air company.

               Article  7058 was amended by House Bill 648, Acts
42nd Leg., R.S. 1931, ch. 222, p. 376; and certain changes were
then made to the original act. The word Usteam” was added; so
the act, as amended, applies to express        companies doing an ex-
press business by steam railroad instead of by railroad as was
provided in the original act. The following was also added:
 *
   . * . or from other sources of revenues received from intra-
state business     during the quarter next preceding.”      The only
other change made by the amendment to the original act was to
provide for quarterly payments instead of annual payments.           We
find upon examination      of the emergency     clause to this amended
act a clear expression      of the legislative  intent. It reads:

              “The fact that it will be beneficial to the reve-
       nues of the State to have express companies      pay a
       quarterly tax in lieu of an annual tax, and the further
       need of amending the statutes so as to make same ap-
       ply to express business   done on other carriers    than
       steam rai roa s, . . .

               We are here primarily   concerned with the following
expression     appearing in the body of the act and constituting a



       1
           Emphasis   added throughout.
. .   :


          Hon. Robert   S. Calvert,   Page   3 (V-1408)




          part of the amendment:     * . . , or from other sources   of reve-
          nues received from intrastate business     during the quarter next
          preceding.”    This phrase, construed in connection with the ex-
          press purpose as stated in the emergency      clause, leads to the :
          conclusion that the receipts from such air line transportation      is
          subject to the tax. In brie&; the purpose of the amendment was
          to impose the tax not only upon the receipts from that part of
          the business done by the steam railroads,     but also upon other
          sources of revenue derived from express business        done by
          other carriers   for and in behalf of the express   company.


                                      SUMMARY

                       An express   company is subject     to the gross
                receipts tax imposed by Article    7058,    V.C.S.,  on
                that part of its receipts arising from     transportation
                of freight by the air lines in behalf of    the express
                company.

                                                            Yours   very       truly,

                                                             PRICE DANIEL
                                                            Attorney General


          APPROVED:

          W. V. Geppert
                                                            By
                                                             L?&?o13f--
                                                                    Assistant
          Taxation Division
                                                                           -

          Mary Kate Wall
          Reviewing Assistant

          Charles D. Mathews
          First Assistant




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