Honorable George H. Sheppard
Comptroller of Public Accounts
Austin, Texas

Dear Sir:                   Opinion No. O-3709
                            Re: Are gross redeipts, earned
                                 wholly within an incorporated
                                 city or town by a "motor
                                 carrier", holding permits as
                                 a contract or s ecial commodity
                                 carrier, under E hapter 277,
                                 Acts, Regular Session, 42nd
                                 'Legislature, subject to an
                                 occupation tax under Article
                                 14, H. B. 8, Acts, Regular
                                 Session., !+7th-Legislature?

Your lstter of June 11, 1941, submits
                                 _    for our opinion the above
question.

Article 14, Section 1 (a), House Bill No. 8, Regular Session,
47th Legislature, levies,the following.occupational excise upon
gross receipts:

"Each individual, partnership, company, association, or
corporation doing business as a 'motor buscompany' as defined
in Chapter 270, Acts, Regular bession of the Fortieth Legis-
lature, as amended by the Acts~of 1929, FirstCalled    Session
of the Forty-first Legislature, Chapter 78, or,as 'motor carrier'
    'contrac-t carrier' as defined in Chapter 277, Acts Regular  -
gzssion of the Forty-second Legislature, over and by use of
the public highways of this State, shall make quarterly on the
first day of January, April, July, and October of each year, a
report to the Comptroller, under oath, of the individual,
partnership, company, association, or corporation by its pre-
sident, treasurer, or secretary, showing the gross amount
received from intrastate business done within this &ate in the
payment of charges for transporting persons for compensation
and any freight or commodity for hire, or from other sources of
revenue received from intrastate business within this State
during the quarter next preceding.    Said individual, partner-
ship, company, association, or corporation at the time of
making said report, shall pay to the State Treasurer an occupa-
tion tax for the quarter beginning on said date equal to two
Honorable George R. Sheppard, Rage 2, O-3709



and tw,o tenths (2.2) per cent of said gross receipts, as
shown by said report. . .'

In order to clarify the scope and meaning of the term
"intrastate business", the receipts from which are made
taxable under the above act, the 47th Legislature, by House
Bill No. 1039, provided as follows:

"The term 'intrastate business' as used in Article XIV,
Section 1 (a) of House bill No. 8, Acts of the Regular
Session of the Forty-seventh Legislature shall mean and apply
only to that portion of'revenues derived from transportation
subject to the regulation of the Railroad Commission of Texas."

The tax levy in question is upon the gross receipts of each
individual, partnership, company, association or corporation
doing business as a "motor carrier" or "contract carrier", as
defined in Chapter 277, Acts, Regular session, 42nd Legislature.
The definitions referred to are quoted, respectively, as
follow3:

"'The term "motor carrier" means any person, firm, corporation,
cornparry,copartnership, association or joint stock association,
and their lessees, receivers or trustees appointed by any court
whatsoever owning,controlling, managing, operating or causing
to be ,sperated any motorpropelled vehicle used in transporting
property for compensation or hire over any public highway in
this State, where in the course of such transportation a highway
between two or more incorporated cities, towns or villages is
traversed; provided, that the term "motor carrier" as used in
this a-t shall not include, and this act shall not apply to
motor vehicles operated exclusively within the incorporated
limits of cities or towns.

'1 The term "contract carrier" means any motor carrier as
herein above-defined transporting property for compensation or
hire over any highway in this State other than as a coinnon
carrier. I"
Although it is not definitely 80 stated, we shall assume, for
purposes of answering your question, that the receipts upon
which the question of taxability is raised, are receipts earned
solely in the carriage of property from one point within an
incorporated city or town to another point within the same
incorporated city or town; and that it is not intended to include,
on a pro rata mileage basis or otherwise, any part of the gross
receipts or compensation earned and collected by a contract or
special commodity carrier, for the transportation of property
over the public highways, bstween two or more incorporated cities,
towns or villages.
Honorable George H. Sheppard, Page 3, O-Ja



Under such construction and limitation of the facts, we do
not believe a person, firm or corporation carrying property
for compensation or hire, under contracts of carriage
originating and ending within the limits of an incorporated
city or town, is thereby constituted a "contract carrier",
"special commodity carrier" or other "motor carrier", as-these
terms are ,above defined, even though the same person, firm or
norporation, using the same motor vehicles, is additionally en-
gaged fn transporting property for compensation 6r hire over
the public highways, between two or more incorporated cities,
towns and villages, under permits issued to him or it by the
Railroad Commission as a "contraot carrier" or "special com-
modity carrier", under Chap. 277, Acts, Regular.Session, 42nd
Legislature.   .

The gross receipts derived from this latter aspect dS the
business would be taxable gross receipts, under Article 14,
H.B. 8, Acts, 47th Legislature, because earned by such person,
firm or corporation as "motor carriers", under the statutory
definit'ion, subject to the jurisdiction and control of the
Railroad Commission and therefore derived from "intrastate
business" aa defined by H.B. 1039, Regular Session, 4'7th
Legislature.   But gross receipts of the same person, firm or
corporation, earned wholly from the transportation of pr,operty
from one point in any incorporated city or town to another point
within said city or town would not be taxable. Such gross
receipts would not accrue from "intrastate business'& as
statutorily defined because such strictly  intra-city operations
would not be subject to the jurisdiction and authority of the
Railroad Commission, under the following proviso or exoeption
to the term "motor carrier",  as defined in Chapter 277, Acts,
Regular Session, 42nd Legislature:
"Provided, that the term 'motor carrier' as used in this Act
shall not include, and this Act shall not apply to motor
vehicles operated exclusively within the incorporated limits
of oities and towns."

Wa understand that the departmental or administrative inter-
;;;;;;ion of Chapter 277, Acts, Regular Session, 42nd Legis-
        by the Railroad Commission is to this effect, and this
fact i: entitled to great weight in support of our Conclusion.

Trusting the foregoing fully answers your inquires, we are
                                        Yours very truly
                                    ATTGR~NEY GENERAL OF TEXAS
PMN:lh/cg                           s/.Pat M. .Neff,-Jr.
                                    By .~ ".~~
APPROVED AUGUST 1, 1941                       Pat M. Neff, Jr.
,y/CJrqv,srSellers                                   Assistant
FIRST A:BSISTANT ATTORNEY GENERAL
