i




             OFFICE    OF    THE   ATTORNEY     GENERAL       OF   TEXAS
                                       AUSTIN



                                                               January 30, 1953

    Xcnornblo‘XaroldliaCmokeq
    Civil Dictriot httornoy
    Dnllna, Toxas
    Dear Lr. 2LccmckQIl:



              Xc are in receipt of
    nokin::0:iropinion 88 to whet&
    ooq3or3t ion o~~,nnlzod
                          for profi                       t              for
    nd vnlorcrutax00 under tho So                               th:,corqmny ws
    inoorporctodunder tha la%3 0                           hew a pcmit to do
    buslncss in this Ltato. i’he                          ock rooidca in
    D%llna County, Totit.
    office and plaoc of
    co;llpany’sassots OS
    thQ mlits OS tile3
    texotidn.




                                   Mrioed Civ11 Gtatutao, provldes.inpart:
                             tc -~nt ahaj.1truly and Ciatinctlg aot
        rortldj                                ;
               "30. hdount       nnd value of ahnroa OS capitnl stock
         oompnnlss    and    assooiatlonbnot inoorporatodby tLo lavts
         or .t:li# ax-&to.
                                                                           I

              “43. Value        of all qthvr property not onuncrated
         above.”
         <     &Aiclo 7163, iievivioad
                                   Civil %ntuton, rccde:
f.



1
      Hon. :IaraldXcCrnckon, Jnnwry 30, 1939, l’a”,c   2


                    "X0 parson sh:\llbo roquulrodto lint or rondor
          a .;rontorportion of illsorcdits tluinho bolievoo \:ill
          bc received or can bo collcotod, or to include in his
          otatozontns a pnrt OS !iioporoon?l pronortywhich is
          rcquirod to.bo list& nny sliaroor portion OS the
          ClliJitnl    otook or property of My ooa~~ny or ocrporntion
          \;jlioh    is required to list or return its cnpitol and
          >roporty for tuxntion."                                            .
                                                                             ,
                 iinvinzrecord for tileco~orato fiction, a tax on s!,arcs.
      of stock in iho h:indnOS the holder ii1addition to n tax on t::o
      propertyOS tho corporationin the hands OS tha corporationwould
      not be double taxation. Bovzvor, tho lo[;islstivo  bodios OS many . , :.-, ' '
      States have reoognized that to all prnotiaalpurposes it would bo
      doubly taxing the property of the oharoholdorand hnve enacted       ~'1,
                                                                             ,~;,, .i
     'Legislationcxemptin(:  the shnros of stook vfhonthe property OS
      the corporationis taxed to the corporation. !Phooourts unhositat-        ;.:~
                                                                                ,I:
      in$.y uphold the exomptionwhen 1oCislntivsbodies hove proparly :          ,')
      evidoncodtheir intont that suoh oxoaiption  shall bo mado. Hubbard - :..:,[
      ;&usf,     55 R. E. 829, Ohio; Commcnvoalthv. Fidelity Tniat.Co.,'-.'
          L). *. 1037, Kg.; Stat0 v.'Lonch, 144 Z. 6. 290, Us.,
                                                                              :,i;;'!
                 At least one court, in a t;tntovrharcthe oourts had hold,‘i"1
                                                                          yzr:.~m
                                                                             :;;:I,:
      that doublo taxationwas forbidden by tho constitutionalproviaion~ :,~.  ,~,',;,
      requiringuniform taxation, outsthrough tho corporato Siotion-nnd           ./
 /~~~ held that on attempt to tnx charesin a Soroi&n corporationwould       * '~3
      be unconstitutional,v:h;horosuoh corporation'sDroporty x39 loonted       ,,,: :
      and taxable within the atnto. Stroh V. City OS Dotroit, 90 ir'. Y.. ,/'~'
                                                                              '~.~~
                                                                                 /~,,
      1029, Suprome Court of KiohiCannn.
  i,                                                                             :I'
                 Other oourts, rcmnrkinGupon the harshnons or taxin             I.
                                                                                 ;
      both the shcros of stock and the oor?ol~ato property, have said that    -' i
      boforo the courts should pamit the s::riiathe lseislativeintont        .
      to do so should bo most plainly maniSost. Bd. or Gom'rs of &la.            I
      Countyv. Rjran,232 Pac. ,834,Okluhoiqa.,
                in Gillo~ie v. Gnston, 67 Tns. 599, 4 j. ';i.248, it MB          /
      hold that 'thoowner of stock in n stnto b&n;-v:asnot taxable t:horo-
      viith,v;hilathe property oS.thc bank was taxnblc (as the law than
      was), although the bank did not return its progcrty fortaxation
      ns it should hove dono.
                As noted above, Artiola 7162., Cot. 30, rcqufros the
      listingof all shares in.oorporutionsorgnnizodunder the IaVisOS
      other stntoo.
      ,,'
        ,
con. iL?.rold ;:cCmckan, Janunry 30, 1939, P5Ce 3                            I


          ;~tion  43, of hrtlcla 7162, ror.uiresthe li5tiw; of the           j*
value of "all athor proparty not enumrntocinbova.* If thi5
brocdlnnr;unCabo !?cldto includa n!lzra5in c doslootfo,couccm,     *
tktn tl;oholdorc OS 5tocks in forcl;;nand do:~sZid ccr?omticno
\:ouldbc on 00~ucltarz.5in tha stctuLc5. &tic105 71GL and 7163       '
~:auldbe iqzrticlly e:qU.cebloan6 Gillaopio v. G:l~ltao.,.~:apm,would       -,
controlin either oven%.
          Tha rmcindcr of thi5 opinion, howvm, ~I11 be bcndd
upon t110ccsu;::pti0:1   cir?cc&xt:.m LX!c~oc;ficr,lly
                    t.lint                            cnllcd for
the lic,tlnSof chnrao in Sorei@ aornorctianc,the Ceuaral lfal~uage y ,:i~
af Section43 would not inalude utacks in do:dasliacorwrutions. ":~.
                                                                  -;~,,:.
          Since Article 7102 thus exanpto'~oharasin Tax55 aarpara-:~,:~,::~.
tianc, tho sax3 wniLQ have no need far AM.010  7lG3~to &r*F:ant
                                                              the23 -:. !~L.:.:~
furtheraxauption.                                                        .':
                                                                      ,:f.,.'.
                                                                            ':
          'LddmuslnC our5alve5 .%rthar to ~~rtiale7163: "X0 peroon       :::I-~
                                                                             :
shallba requirad . i . to include in hi5 stntozient 85. a part of   : 1'~:
                                                                         i,',~~.
his pereoxl proparty--which ,lsracuired to ba lletad (this cnnnot ~,~~,.:,:,:
refcx~to nhmes. in a domastic cor~aratio~~n:iy?TiiEor portioti   'or :::::::-::1'~~
the ccpitnl ctock . . . of any caqm-ation v:hlch3.5zequirod to ~" ,'.?:r,;~
list or roturn it5 capital ond pxaparty for~taxation."     ,sj      ~_,,I
                                                                        '.:,.,::
                                                           ~.I
          This urticla vrnnevidently intended to grmt to tha
amer cf ctock in Q corporationor~zuisadundar the la::5of 5ana
otlmrstate the sme exemption 55 Article 7162 hod Clven to the
holderof stock in a 'Yc:~cOcorj?orLKo::,T;?mn511 t,hogroparty of        :
5uahforciCn caq)omtion is located fuS randared for taxation in
the &ate of %ras.    Icdood w cm a00 no ronmn vihy.thaLoy,,5ln-            ”
turo should~lmvo?Lahod tc aroota any \Iincri~:Lnntioii
                                                     batvrean~~the
two under ouch condltlono.
         ThcLntock you daocribe frillsoquaraly wlthiu the exenption
provldodin Article 71$3 und io not oubjoat to tha'ad valorea tax.
