            THEA~~~ORNEY               GENEKAL
                        OF%.-EXAS




Honorable Geo. H. Sheppard
Comptroller ofPublic Accounts
Austin, Texas

Dear Sir:                  Opinion No. O-762

                           Re: pCiFt$nc;s   under A,,ticle 7047,
                                . . .     , where the State of
                               Texas levies an annual occupation
                               tax at a certain rate, due and
                               payable in each and every county
                               in which the occupation is
                               pursued, in what amount and manner
                               should the County.tax of such
                               occupation be luvied and collected?

In answering the above question embodied in your letter of May
8, 1939, cavequote from said letter as follows:

"Chapter 212, Acts of the Regular Session of the 42nd Legisla-
ture, provides that all occupation taxes are payable in advance
unless otherwise provided by law, and establishes an uniform
expiration date as of December 31st of each year, thereby
making it necessary to pro rate the'collection of such taxes
from the time the occupation commences to the end of the
calendar year.

"In opinions written by Grady Chandler January 5, 1928,
Clark C. Wren June 29, 1936, John McKay February 27, 1937,
and a joint opinion by John McKay and ,J..H. Broadhurst
March 23, 1937, it was held that Article 7047, R.C.S., must
be read in connection with Article 7048, R.C.S., the last
named Article providing that State occupation taxes cannot be
collected for less than one quarter. These opinions conse-
quently hold that the occupation tax must be collected from
the beginning of the calendar quarter in which such business
commences to th? end of the calendar yearand not from the day
the occupation commences.

"We have recently had severalirequests from County TsXAssessor
Collectors for a ruling as to the proper procedure in collecting
the counties' part of such occupation taxes.
                                                           ..      .




Hon. Geo. H. Sheppard, Page 2, O-782



"The Constitution of Texas provides that counties and cities
may levy and collect one-half the anount of the occupation
taxes levied by the State. The county commissioners of the
various counties usually enact a blanket levy imposing a ccunty
tax one-half of the State tax upon all occupations on which the
State has ,imposed a tax.

The first question, however, must pertain to the State tax.
The Statutes provide that some of the State occupation taxes are
due and payable in each county where the occupation is pursued.
As an example the Occupation Tax on carnivals (Art. 7047,
Subdivision 2sb) reads as follows:

"(b) Carnivals -- From every carnival, an annual tax of One
Hundred Dollars ($lOO.OO), which State tax shall be due and
payable in each and every county in which such carnival shows or
exhibits.'                           ,,,

"A carnival rarely ever shows longer than a week ortwo weeks
in any one county, yet if the tax is to be prorated (as
provided in Subdivision 42, Art. 7C47), it must pay $100.00
per county.in the counties it shows during January;* February
and March, but in April, May and June, it would only be re-
quired to pay $75.00 for each ccuntg in which it performs.
In the next qarter the tax would be $50.00 per county and in the
last quarter f25.00 per county. It appears that the Legislature
merely intended to establish a uniform expiration date for
occupation taxes but in a case ofthis kind, it has the effect
of reducing the tax.

"The first question therefore is as follows:

Where the Statute fixes an annual tax and then provides it is
due sandpayable in each and every county where the occupation is
pursued, was it the intent pf the Legislature that the full
amount of the State annual.tax be collected in each county, or
was it intended that the tax be prorated from the quarter the
occupation commences in each county to the end of the calendar
year?

"If you hold that the State tax on a carnival and other occu-
pations payable in eachcounty separately is not subject to prora-
tion, will the counties collect onehalf of the full levy, or
will such cmilties b$.~com ell.ed ,to cof'fect fOF'Une~quart& only
as provided in Article'70 E 8,::,R.C.S.? ._             .      ..
            ,,
                      > ~~*
"Conversely, if you hold that the State tax on such carnival or
other occupations which pay separately in each county may be
prorated as other occupations taxe$#,will the counties collect
Eon. Geo.   H. Sheppard, Page 3, O-782



one-fourth of one-half of the amount lev'ied for a full year,
or will such counties collect one-fourth of one-half of the prc-
rated amount the Sttte collects.   In other words, let us say  ,I
the occupation commences in July and the State collects $50.00
the pro rata psrt of the last two quarters of the calendar
year. v/ill the counties collect one-fourth of one-half of
$>'O.OO or onerfourth of one-half of $lOO.OO?"


;iefind no authorities to assist us in arriving at a correct
interpretation of the tax measure involved in your inquiry,
but from the opinions adverted to in your letter and the
pertinent constitutional and statutory provisions, we are
of the opinion that it was not the intent of the Legislature
that the full amount of the State annual occupation tax be
collected in eachcounty @here the oc~cupation is ~pursued,
regardless of the time during the calendar year when~the
occupation commenced, but, on the contrary, suchtax should be
prorated from the quiirter the occupation actually~ commences in
each county to the end of the calenda: year. This has been
the consistent ruling of this Department in the opinions.cited
by you where the occppation tax is levied by Article 7047,
Revised Civil Statutes, annually, on a state-wide basis only,
and we find nothing in this tax statute or any of the other
pertinent statutes whichnould disallow the benefits of a pro-
ration on the basis of the time the occupation was actually
pursued during any calendar ye%;,:", those instances under
Article 7047, Revised Civil          , where a more burdensome
occupation tax is levied by the State, due and payable in each
and every county where such occupation isfollowed.

Our answer to your first westion renders unnecessary an answer
to your second, and we accordingly pass to a consideration of
your third and last question, involving the amount and manner
of the collection by counties of occupation taxes in those
instances where the annual occuaption tax levied by Article
7047, Revised Civil Statutes, is due and payable in each county
on a pro rata basis from theb eginning of any quarter in which
the occupation commences to the end of the c alendar year.

In this connection, Section 1, Article 8, Constitution of Texas
provides, in part, as follows:

"And provided further that the occupationtax  levied by
any county, city or town for any year on persons or corporations
pursuing any profession or business, shall not exceed one-half
of the tax levied by the State for the same period on such pro-
fession or business,"
Hon. Geo. H. Sheppard, Page 4, o-782



From the foregoing constitutional limitation upon the amount
of occupation taxes which maybe levied by.the counties of this
State, it is our conclusion that the .amount'of the annual OC-
cupation tax levied by Article 7047, hevised Civil Statutes,
rather than the amount actually collected by the State fromany
given occupaticn, isde%erminative of the amount of occupation
tax which maybe constituticnally levied upon such occupation
by any county. Us!ng subdivison 2.5b, Article .7047, Revised
Civil Statutes, mentioned in your letter, as an illustration
of this point, we believe that the amount of county occupation
tax fixed and allowed by the Constitution of Texas would be
one-half of the annual tax rate cf $100.00 on carnivals, rather
than one-half of such amount as might actually be collected
from any givenc arnival in any certain year byreason of its
exhibition in several counties of Texas. The latter figure
would be variable withe ach year and each carnival, sndthe
conwissionersl court, in levying the county occupation tax,
would be unable ther~efrom to levy suchtax at the beginning
of the calendar year in any definite sum. For these reasons
we believe the basic annual tax fixed by the Legislature in the
various subdivisions of Article 7047, Revised Civil btatutes,
is controlling in calculating the allowable county' occupation
tax rate cn any particular occupation.

Inasmuch as, under the statutes governing the collection of
county occupation taxes, and the opinions of t'nisDepartment
constraing same, such taxes maybe paid quarterly basis, it
would follow,fkom the loregoing, that counties would, on a
quarterly basis, collect an occupation tax of one-fourth of
one-half of the amount levied by the State for a full year'on
any given occupation. Using the illustration given by you in
your last question, and assuming that a certain occupation
commences in July and the State of Texas collects $SO.CO, the
pro rata part of annual tax of $100.00 for the last two quarters
of the calendar year, it is our answer that the county
occupation tax upon the same occupation for one quarter of the
calendar year would be one-fourth of one-hal~f of $100.00 rather
than one-fourth of one-half of $50.00.

Trusting that the foregoing fully answers your inquiries,
we are
                                Yours ver truly
                            ATTORNEYGENF&      OF TEXAS
                            ~/!..pc&hI.Nef'f,~Jr.
                            BY
PMN:N/cg                               Pat M. Neff, Jr.
                                            Assistant
APPROVED JUNE 23, 1939
S. Gerald~C. Mann
ATTORNEY GENERAL OF TEXAS    Approved Opinion Committee
                             By BW, Chairman
