      OFFICE OF THE ATTORNEY GENERAL OF TEXAS
                          AUSTIN




Honorable George B. Shepparb
Comptroller of Pub110 Aooounts
Auatln, Texas
Dear sirr




     to the Stat
     tares.  ThI

                                 s not heretofore  been oonaldered
                                  by this department, we deemed
                                 ore rintuy rendering our oplnlon
                               epartment at WashIngton It there


                      between our government and the RepublIo
                      s us, however, that property owned by
our government and used for embassy and oonsular purposea In
Yexloo City is not taxed by the Mexloaa Government.       With
his letter  he ha8 kindly submitted copies of oplnlons or the
Attorneys General from the States of Callfornla,      Miohlgan and
Massaohusetta oonelderlng   this question,  all hole      property
or foreign governments In their respeotlve     states used ror
goveramental purposes free from taxes.     We wish to arrknowledge
the kindness of Yr. Haohorth    and his valuable aid to us In
the oonelderatlon  or this questlon.
Honorable   George R. Sheppard,    Page 2


           0~ inveetigation    has extewled beyond the lawa
0r our own State,  an&  we  hare not found a oa89 paseing
dIraotly  upon tha question oontalned In YOU letter.      Re
belleve,  however, that ruiriqient   analogy oxlets to the
easea we haye round to support .the OOnOlUlOn we haYe
reao hod.
              1t may be oonoeded that the language 0r the.
Coaatltution     is broad eoougb to Inelude all property rlthln
the jurlsdlotlaa     of this    State as subjeot to taxation unlesr
lxpramly exsapted br the Constitution          and statutes   of this
State, and that the provision        In our Constitution    WhIoh
erempta pub110 property usad ror publlo purpoeea applier
only to pIWOrty owned by the State or some polltfaal            dIYI-
aioa thereor.,     Thle being true, the question Is: ‘Did the
tramers of the Constitution        Intend to tax the property    of
a ioreign rovereignty        under the oiroumetsnces involved here?
           AII stated In the OaBe of Prenoh Republlo Y. Board
of Supervisors    or Jeiieraon County et al., by the Court or
Appeals or Kentuoky, 252 9. W. 124.1
                “In oonetruing the taxation provIsIon      or our
         Constltutioa,    we a;rii   be oareiul not to overlook the
.:. !: ~,:aaturo or a tar.           an enforosd oontrlbution   or
         money or other property assessed      ln aooordanoe with
         some reasonable rule or apportionment by authority        0r
         the eoverelgn state on persons oi property within its
         jurisdlotioh    for the purpose or defraying the pub110
         expense.”     26 R. C. S.,page  13
           We take the liberty   to quote Word this ease rather
rullg, aa it more nearly expresses the reaaona for our holding
than any other ease we hare round.      In this ease the State or
Kentuoky sought to tax a large quantity of tobaooo that had
been purahased by the Prenoh Gorernaent for fmbsequrnt export
to the Republlo of yranoe.     ThO Frezioh Government re.sIsted
the assersment and oolleotlon    or thle tax by the State or
Kentuolq-, and the oourt ln passing upon the qulatlon raid:
            *It is oonoeded that the Frenoh Republlo is not
      suable   In our oourts without its oonsent, and that the
     tobaooo lteelt    oannot be subjeoted to the payment or the tax.
     Therefore,    ii the assessment be upheld, we have no way or
     oolleoting    the tax.   We can neither negotiate    nor declare
     war.    All  that we  oan do  Ia  to ask the State  Department   to
     open international     negotiations,   or persuade Congress to
     deolare war, for the purpose ot oolleotiag        the tax, thus
Honorable   George &Sheppard,   Page 3


     presenting a etate   of hilpleaaneaa  wholly   at varlanoe
     with the sovereign   right oi taxation.

            “Ia the next plaoe,.taxea    are Imposed on the
     theory that the taxpayer should pay a portion or the
     expense Inourred In the proteotion      of hle person or
     property,   and a8 applied to ordinary peraonmr.and
     oorporatlona   this prlnolple    seem8 eminantly fair and
     @at; but aa applied to independent natlona It Is
     olearly oppoeed to the apirlt of InternatIonal       amity,
     whioh should prompt every n&tIon to guard and proteot
     the personal property of all other nations that happens
     to be temporarily within Its jurIadIotIon,      without
     levying a tribute   for that purpose.
           “Another oonalderatlon  not to be overlooked   la
     that the abeolute sovereignty   oi every nation within
     Its own terrltorg  does not alwaya extend to roreign
     natlcne,  but la subjeot to oertain limitations    aano-
     tioned by the law of nations and lmpoaed by its own
     oonaent.   As said by Xr. Chief Yustioe  Marshall In
     the Sohooner Exohange v. MoFaddon et al, 7 Cranoh 116,
     3 L. Ed. 287:
            *)A nation would justly be oonaidered as violating
     Its ralth,   although that ralth might not be expreealy
     plighted,   which should suddenly and without previous
     notioe exeroIae its terrItorIal   powers In a m6nner not
     oonaonant to the usages and received obllgatbone    of the
     oIrIlIzed   world.’
           *Henoe, Ir one nation enterakthe territory   of
     another with Its oonaent, ior the purpose oi mutual
     Interoourae,   it does so with the Implied understanding
     that it doe8 not intend to degrade Its dignity by plao-
     lag Itself   or Its sovereign rights wlthln the jurladlo-
     tlon of the other, and we know of nothing more oaloulated
     to degrade the dignity or an Independent nation than for
     another to attempt to exeroIae over It the sovereign
     right of taxation.
 Eonorable   George H. Sheppard,   Page   4
                       ..

             Woreover’, the provisions  of     our Constitution
       rhould be oonatrued In the light       oi history  and the
       unliorm dealing or one power with       another.   So tar
       aa we are aware, no state and no       nation, at the time
       or the adoption oi our Conrtltutlon,       had ever assumed
       the right to tax the peraoxial property      oi a qorelgn
       power that happened to be temporarl3q wlthIn~~lt8
       jurladiotIon.      Indeed, there were ntmeroua treaties
       exempting ordlnaq      oonrula from pareonal taxation,
       unless they were oitlaena      and owned real estate,   or
       were engaged in bualneaa where the ooneulate was
        Ituated.     United States Oonaular Regulations     1696,
       8 63; 7 0~s. Attys.      Gen. 16. Therefore    we are oon-
       etralned to hold that the framers of our Conatltutlon
       did not Intend to inaugurate a policy so opposed to
       International    usage, so lnoompatlble with the dignity
       or Independent nations,      and so likely to result In
       the loss oi the good will or those whose frIendahIp
       we hare always prleed.       As the property was not taxable,
       It should not have been aaaeaaed.
             9. . .”
            It Is true that this oaae Involved perronal property,
 but we do not regard this raot au.rrIoIant to ohaage the reason
 underlying the exemption as expressed in this oaae as It would
 apply to real property.
             It la turthar noted that thla oaae advanaea as one
  reason ror the exemption the lmpraotloablllty   ot oolleotlng
  taxes by one government from another aoverelgn government
  by any legal ~prooeaa. True, this does within itself    afford
  a reason ror the exemption, but we ara lmpreaeed with the
  broader prinolplee   upon whloh the oourt baaed its deolrlon
  namely, the obaervanoe and malatenanoe oi smiabla lnternat i onal
. relatlona.
             We take  It that regardless   of the various ways anrule
 of Iatematlonal    law may arise,   one of the moat aatIaraotory
 methods would be by the mutual reoognltlon      of Its exIatenoe bp-
 tween the governments oonoemed.        Slnoe the Republlo of Mexico
 has aooorded rreedom from taxation to the property oROur
 government used for fta embaaalea an4 oonaular oiiIoeC~ln
 Kexloo Olty,    t%Ia alone would In our opinion afford the moat
      Ronorablb    George   ii.   Fheppard,   Page   5
I                                 \
,’

      lau4able rosson Par the exemption from tcxatlc,n by our State
      an4 the various politioal   sub4lvlslons   thereof of the property
      or the Yexloan Govera#.nt looate      in our state US44 for 0fri0Q6
      an4 bouslng of its 4Iploaatlo   rapressntatlver.    We should   reoog-
      nlzr this as a binding obligation     upon us under 1aternatlons.l
      usagb an4 international   law.  The Paquets Ravana, 175 U. S.
      677, 700; Sklrlotaa v. State of Plorlda, 313 U. S. 69,.72 L.
      Ed. 824, 827.
                 In the oaee of Hasbn v. Intercolonial  Railway, 197
      Uass. 349, mentlog 1s made of the theory OS Impraotlcablllty
      of one sovereign ‘&bate enrorolng~ the oolleotlon of tares
      ag&Inst another/stating:
;
                  “. . . Buti the rule upon whioh these decisions              are
           base4 goes muoh deepQr than a refusal to assert mere
           judlolal     jurls4lotIon.      It Involves a waiver of all
           sovereign     power.     Ii a nation   permits a rorelgn sovereign
           or hls orflolal       represertatfves     to enter the territory
           of that nation or to hold property thereln,               it lmplle4ly
           oonsents that all sovereign rights of suoh foreign nation
           shall be recognized.         One or these essential         rights is
           Independenoe of every other sovereign.               For the Coq;lon-
           wealth to Impose a tax upon the property of any sovereign
           within Its borders would not only be exeroislng                 a jurls-
           diotlon     to interfere    wlth the rights of that sovereign
           In suoh property,        but would be taking the further step              .
           of attem.ptIng to Impose an obligation             upon such sovereign
           to oontrlbute       towards the publio expenses of the Com~non-
           wealth.      It would be asserting       s JurIsdiotIoW mcro fmda-
           mantel    in. character,    6ver1,  then  judicial    jurlablotion.
  #        In my julignnent, the tax statutes of the Cosc;onw&alth must
*_         be read In the light of these prlnolples,              and when so
           read, they roust be oonstrued ae not asserting               any poser
           to tax which Is ct variance with them.”
                   We find the following In the case of firin_ya v.’
      Ughtboeta,     11 fillan 157, li%:
                   “The jurle4IotIon     of eaoh independent nat Ion is
            neoessarIly.excluslve       and ubcolutc wlthin its own terrl-
            tory.    However, by oommon consent among clvlllzed        nations,
            a oonsent largely      implled from oon%on usaga an4 the neoes-
            sltles   of mutuel lnteroourse,      that absolute jurisdiction
Honorable George Ht Sheppard,    Page 6

                   .
    Is not assQrtQ4 against torrlgn sovereigns      or their
    eorerrlgn rights. Whether this be aalled a rule or
    oomlty or of law, it has beoome a settled prlnolple
    ot International     relations  rhloh has long been reoog-
    nIzQ4 by the SUprQmQCourt or the United States.
    SOhOOn6r Exohan&Q v. fl*Fabdon, 7 Cranoh, ~6.        It Is
    well settled    that the oourts ot one nation will aesert
    no jurlsdlotion     eIthQr against the person ort8hQ..
    property ot a foreign       sovereign. Brlggs v. Lightboats,
    11 Allan, 157, 184.”

           It Is apparent from the roregolng that.wb are
of the opinion that property situatpd In this StatQ, whioh
ia owned and used by the Republlo of Mexioo for govern-
mental purposes, whether real or personal,   Is not subjrot
to a4 valoren taxes by this State or any polltloal    sub-
division thQrQOi, and you.are  aooordingly  so advised.
                             .   Yours very truly
                            ATTORNEY
                                   GENE!W OF TEXAS


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