     OFFICE OF THE ATTORNEY GENERAL OF TEXAS
                       AUSTIN




Honorable Gee. Ii.Sheppard
comptrollerof wbliu Aoeountr
Austin,Torae

Dear S1rr          0plnlon no. O-la
                   Re: ReduotioA OS


            are In rmml
                                                  is




                               0 stat0 or Led-
                               tlon with the
                               d La Texas.
                               806lrb8 your
                               the taxpayer la
                               sd would be a'e-
                   r&r    the YenQr'o lion Bate
                  rt themof ior taxes in T-s.*
EOnorablO Go. B.


           hrtiole 7147, Revised Civil Statutes, 1925, reads
as   r0110r0:




           ii registered in this State, whether at
           hams or abroad, and all oapite3.lnvestod
           theraln; allmonem at interest. elthar
           dthin or without the State, due the per-
           son, to be taxed over ,andabove what h
           pays interest fbr. and all other debts'
           due such person over and aboro hls lXl-
           debtedneos;all pubiic stook and eecurlr
           tfee; all stock in turn-pikes,railmada,
           osnals and other corporations (exoept na-
           tlOndl banka) out Or ths State, owned by
           inhabitants or thla Stats; all personal
           lState Of moneyetd corporations,whothor
           the mars thenof re8ide In or out of
           this 8tate, snd the Imom or any anup
           ity, unless the oapitfikor such annnl$y
           be taxed within thir State; all aharea
           1x1any bank orgsnlaed or that may be or-
           garbed under the laws or theunlted
           St&em; all lmprovavnta made by persons
           upon lsnde held by them, the title to
           which Is still tasted In the State Of
           Texas, or ln any railroad company, or
           which have been exempted imar taxation
           ror the benerit or IMT railroad 'aoapaay,
           or any other oorporationtihose.pro$arty
           is not nubfeat to the same tie and rule
           or taxation as other property.*
          It lo provided in Artiols 7149, Rerls.6 Civil
Statutes, 1925, that:
                "'Ceddlts.' - me term 'credits,'
           wherever useUd:inthis title, shall be
           held to mean and lncllodoevery olaim
           and demand ror mney or other valuatble
           th*,   and etev   .dutmity   or   Mimi of
           mroriey~
                 receivableat stated period&
                                                              1.27

Honorable Gee. B. Sheppard*Page S


          due or to become due,.and all olaime and
          dsmenda scoured by deed or mortgage, due
          or to beoome dueru
          The taxable sltua or the $lS,OOO.OOvendor*8
lien note, in the kbsence of addiflonal rac*i, Is the
domicile or the owner, whether seaured.orunseoured.
          Ferris vs. Xemble (S. Ct. l&39) l&
               S.W. 689
          Connorsvs. City or Waxehaohle (8. ct.
               laS9) 19,S.W. SO
          Great Southern Lirs Znsura~a co. VB.
               alty or Austin (s. ct. 1922)
               243 S.W. 770
          Article 7147 lnaludeswithin the deflnltlonof
p~r6ondL property *all moneys, oredits,bonds and other
ovidmoe   of debt owned by cltizsns of this State, whether
the 661~ be in or’out or the State.* Artiole 7149 defin-
lng ?zedlts* gives to such term a broad meaning so as to
include orerg claim and demand iormoney whether sbcumd
or unsecured. No dlstlnat'ion 15 made between aredlts
whether satniredby reel or personal @ropertp or whether
the property seeurlng same 1s looatsd~wlthinthis Stats
or without It,6jurisdlotlon. ,A,claim or demand ior money,
unless otherw$ss provided by statute, woul~~e~sarlybe a
*debt due suah person* as set out in ArtfdI.e'?147,al-
thou@ evldenaed by a promieeorynote. As we aonstrue
Artiole 7147,'lta srreot is to tax‘ths "net oredlts*
owned by a person by allowing a deduction of the debts
wed by him from the debts due auoh per60nr The result
of thls la to arrlve at the taxable value or one ltea
0r personal property, i.e., "oredits.* Thla oonstruation
1s supportedby ZIUobservationmade by ;TustloeGaines in
Griffin vs. Heard (S. Ct. 1890).14 S.W. 892, a8 follows:
              "The effect of these provisions
         1s simply to eubjeot to taxation,‘in
         addition to tangible property, all
         moneys aotuallybelonging tothetax-
         payer, end any sxaees t&at may exist
         0r his areaits over hie lndsbtedness.'
          The tax in the instant aese la levied against mn
item 0r intangiblepersonal property or whlah the taxpayer
18 the owner whether eecured or uneeaured, end not egelnst
the undarlylng tangible prop&Q by which lt may be meeured.
Whatever the situ5 or the aeourltg, we think i'tls nonethe-
Honorable Gee. H. Sheppard,Page 4


less an indebtednessof the taxpayer and may be dsduotad
in arriving at his taxable oredits.

          Nor do we think the faot that there is no oonneo-
tlon between the $lS,OOO.OOand 87,GOO.OO items, and that
they do not arias out of the same transaoti~n pretant a de-
duction. The apparent purpose oi the statute is to arrlre
at the balanos of the total debts due suoh person over and
above @Is total indebtedness.
          It Is our opinion. under the iaOt8 stated, that
the taxpayer would be reqdred to reader as his taxable
oredlte the value of the $15,000.00note less the $7.000.00
Item or indebtedness.

                                     Your5 very truly
                                 ATTOHNXYGEMERAL   O? TEXfiS




   ATTORNEY GENERALOF TEXAS




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