           THE       ATTORNES          GENERAL
                        OF   TExpis



                       January 10, 1968

Honorable Robert S. Calvert
Comptroller of Public Accounts
Austin, Texas
                                Opinion No. M-188
                                Re:   Whether certain insurance
                                      companies whkch pay a gross Jo.
                                      premium receipts tax are sub-
                                      ject to Limited sales and use
'Dear Mr. Calvert:                    tax.
       You have requested an opinion as to whe'thertwo certain
insurance companies which pay a,gross premium receipts tax are
also liable for the limited sales, excise and use tax.1 The
first company writes fire and casualty insurance and is subject
to the gross premium receipts tax imposed by Article 7064.2 The
se~condoompany writes life insurance and is subj.ect'tothe gross
premium receipts tax imposed by Article 4769.3
       Our opinion is that 'each of these insurance companies
is subject to the sales and use tax.
       Article 7064 imposes a gross premium receipts tax on
certain insurance companies other than life, and contains the
following relevant provisions:
            "No occupation tax shall be levied on
        insurance companies herein subject+ to the
        gross premium receipt tax by any county, ~'
        city or town. . . . The taxes aforesaid
        shall constitute all taxes collectable under


1.   Chap. 20, Title 122A, Taxation-General, V.A.C.S.
2.   All references to Articles are to Vernon's Civil Statutes.
3.   Art. 4769 is shown at page 484 of,Volume 14A, V.A.C.S. (1963).



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Ron. Robert S. Calvert, page 2 (&188)


      the laws of this State against any
      such insurance carriers . . . No
      other tax shall be levied ox conected
      Earn any insurance carrier by the state,
      county, city or any town, but this law
      shall not be construed to prohibit the
      levy and collection of state, county and
      municipal taxes upon the real and personal
      property of such carrier. . . .'I (Emphasis added .I
       Article 4769 imposes a gross premium receipts tax,,on
certain insurance companies and contains th,efollowing relevant
provisions:




       and municipal ad valorem taxes upon real
       or personal properties of such.;,insurance
       organizations." (Emphasis added.)
       Each of the companies claim to be exempt from the sales
and use tax by reason of the provisions in both Article 7064
and 4769 to the effect that only the gross premium taxes and
the other taxes specifically named in said Articles may be
imposed upon the companies. We do not agree with this      ..'
contention.
       Our construction of these Articles is that these pro-
visions exempt the companies covered by them from,
           (1) any other occupation, privilege or
       franchise tax which might be imposed upon
       them by reason of their engaging in any type
       of insurance business subjected to the gross
       premium receipts taxes by either of these
       Articles:




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Hon. Robert S. Calve&,   page 3 (M-188)


           (2) the other specific taxes named in
       said Articles, none of which relate either
       primarily or exclusively to either insurance
       companies or the business of writing insur-
       ance.
       The exempt language simply means that the comp,anies
which pay the gross premium receipts taxes are not subject
to any other types of occupation, privilege, or franchise
taxes.
        Our Supreme Court in Hassell v. Commonwealth.Casualtv
& Ins. Co., 143 Tex. 353, 18hS.W.2d s-.)17. _-_
                                            919 119451.
                                                .--.-, wherein
                                                        .._______.
f he court considered similar language of'section 19 kf
Artic le 4859f which read,
           "Except as herein expressly provided,
       noinsurance law of this State shall apply
       to any corporation operating under this Act,
       and no law hereafter enacted shall apply to
       them unless they be expressly designated
       therein."
The Court then said,
           "The provisions of the foregoing sec-
       tions do not exempt mutual companies from
       the law of respondeat superior, or from
         y of the principles of general law. ,The
       ZFovisions referring to 'insurance law"
       do not have the effect to place the subject
       companies beyond the pale of the general
       law of agency. Calhoun et al. v. The Mac-
       cabees, Tex.Com. App., 241 S.W. 101." (Em-
       phasis added.)
       This same statutory provision was again construed to
the same effect in the later case of McCoy Undertaking Co.
v. American Cas. & Life Co., 248 S.W.2d 311 , 313 (Tex.Civ.App.
1952, error dism.).
This was the rationale of our holding in Attorney General's
Opinion No. C-590 (1966).




                           -895-
Hon. Robert S. Calvert, page 4 (M-188)


       Our Supreme Court has recognized the similarity of
the gross premium receipts tax and the franchise tax. The
Court has stated,
          "Insurance companies required to pay
      the tax imposed by Article 7064 are speci-
      fically exempted from payment of franchise
      taxes. Article 12.03 V.A.T.S. Tax.-Gen.
      The gross premiums tax like the franchise
      tax is a charge which corporations subject
      thereto must pay for the privilege of en-
      gaging in business in Texas, and the levy
      is made annuallv. . . ."
      State v. Nationii Lloyds, 368 S.W.2d 765, 766
      (Tex.Sup. 1963).
       We do not believe that the Legislature intended that
insurance companies operating under either Article 7064 or
Article 4769 should be exempt from general tax laws which
are not related primarily to operating as an insurance com-
pav . For example, an insurance company would not be exempt
from paying gasoline taxes on gasoline used by company auto-
mobiles, or state sales tax on items of furniture, equipment
and supplies purchased for use in the business.
       The sales and use tax is wholly different in its'nature
from the gross premium receipts taxes paid by the insurance
companies in question which are in the nature of franchise,
privilege or occupation taxes. The sales and use tax is a
transaction tax. Calvert v. Canteen Company, 311 S.W.2d 556,
558 (Tex.Sup. 19637. Neither does the sales and use tax bear
any particular relationship to the business of insurance.
       On the other hand, the sales and use tax is a general
tax which provides in Article 20.04 the only exemptions from
its coverage. These exemptions are specific in their nature
and we find nothing in'them which exempts any type of insur-
ance company from their terms. The very completeness of the
taxing scheme as set out in the sales and use tax act, to-
aether with the clear, specific and limited exemptions from
that Act, support our-opinion. State v. MauritzlWells Co.,
141 Tex. 634, 175 S.W.Zd 238, 242-243 (1943).
Hon. Robert S. Calvert, paqe 5 (M-188)


                             SUMMARY
                                      '5
             Insurance companies subj&ct to the'
         gross premium receipts taxes imposed by L
         Articles 7064 and 4769, Vernon's,Civil
         Statutes, are also subject to the Limited
         Sales, Excise and Use Tax imposed by Chap-
         ter 20 of Title 122A, Taxation-General ,of
         said statutes.




WEA:tb
Prepared by W. E. Allen
Assistant Attorney General
,APPROVED:
OPINION ..COFIMITTEE
Hawthorne Phillips, Chairman,
Kerns B. Taylor, Co-Chairman
Robert Davis
Ralph Rash
Brandon Bickett
STAFF LEGAL ASSISTANT
A. J. Carubbi, Jr.




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