                                                                                           1    243

                          THEA~TORNEY     GENERAL
                                 ~IFTEXA~
                                          Aven~.      TEXAR

pRIa.xs   DAN-
l-“m--=
                                         August 5, 1948


            Hon. Geo. H. Sheppard                    ‘~ Opinion No. V-648
            Comptroller of Public Accounts
            Austin, Texas                               Re:   Taxable ata@~~ of certain
                                                              types of stock transfers
                                                              to and from ‘Szustodians.’

           Dear Mr, Sheppard:
                        . .
                         You-r~qu@?ur.opinion      as tp what+    th?, stock t+~s-
           fer tax levied under .Article 15 ,of H. B. N6. 8; 47th L~gislatnrq, -as
           amended by S. 8.. 141; SOtkLigislaturc,     would acckne in the fqU.ow-
           ing types’of transfers:
                                                         ,:  .:.    ~.
                         .%. From ihe ~iarne of-an owner tq the name~,of
                             a i&nine~ of a ‘custodian.

                           “2. From ,thg aame.of a nomin+ of a custqdian
                               ! back to the name of w owner +r whom. tba
                               -nomixiTe b+d held the sba+vzs.         .. ‘~    .’
                                                                .~~.Z..
                          .t$. ~From.tbe +me.of     one’nominee ef..a cust+
                                 dian to the x+me of another nominq      of the
                                 name custodian.

                           “4.. From ihe~name of a nominee of a curtpdi~~~
                              : tomthe name’ .&fa, nominee oJ a ~7      cw t&an
                              .foctha sauiq~gtier,m

                       ‘The Texas-Stqck Transfer Tax~Act is eodvisd’rs                  Arti-
           cle 7047xi and ieads,.:in past, as ‘f~llonsr
                          .,          .,T~.,.
                            %+ctlon L ,,8There is hj?reby,ixn&sed and~l&ied
                    a tak as .hereilufter provided. eonall,sal+j      agreoriqbts
                    to sell1 or ti6moranda of sales: and all deliveriis         im
                 . transfers of sharesi or.certificates        of stock; or cer-
                    tificates:for.i$jlhts   to atock; or certificates of deposit
                  . rsprssenting +x8iatetcst ia ar reprisen%ing~~crtJficat~s
                    made taxable uixd+r this~sectio~      in any dauytic      or for-
                    eign.issociation,     Citipany, or corporatfon;    or’cartiff-
                    cates of interest in any~basiaass:conducted by trustee
                    or trustees made ‘after the affective date hereof,‘wheth-
                    cr made upon or shown by the books of the association,
                    company. corporation, or trustee, or by any assignment
244   Hon. Ceo. H. Sheppard, Page 2 (v-648)



           in blank or by any delivery of any papers or agree-
           ment or memorandum or other evidence of sale or
           transfer or order for or agreement to buy, whether
           intermediate or final, and whether investing the
           holder with the beneficial interest in or legal title
           to such stock or other certificate taxable hereun-
           der, or with the possession or use thereof for any
           purpose, or to secure the future payment of money
           or the future transfer of any such stock, or certif-
           icate, on each hundred dollars~ of face value or frac-
           tion thereof. Three (3) Cents; except in cases’ where
           the shares or certificates are issued without dcsig-
           nated monetary value, in which case the tax shall
           be at the rate of Three (3) Cents for each and every
           share.. . . It is not intended by this Article~to im-
           pose a tax upon an agreement evidencing the depos-
           it of certificates as collateral security for money
           loaned thereon, which certificates are not actually
           sold, nor upon such certificates so deposited, nor
           upon transfers of such certificates to the lender or
           to a nominee of the lender or from one nominee of
           the lender to another, provided the same continue
           to be held by such lender or nominee or nominees
           as collateral security as aforesaid: nor upon the re-
           transfer of such certificates to the borrower; nor
           upon transfers of certificates from a fiduciary to
           a nominee of such fiduciary, or from one nominee
           of such fiduciary to another, provided the same COP-
           tinue to be held by such nominee or nominees for
           the same purpose for which they would be held if
           retained by such fiduciary, or from the.nominee to
           such fiduciary; nor upon mere loans of stock or cer-
           tificates, or the return thereof; nor upon deliver&s
           or transfers to a broker for sale; nor upon deliveries
           or transfer by a broker to a customer for whom and
           upon whose order he has purchased the same. but
           transfers to the lender, or to a nominee or nominees
           as aforesaid, or retransfers to the borrower or fidu-
           ciary: and deliveries or transfers to a broker for
           sale, or by a broker to a customer for whom and up-
           on whose order he has purchased the same shall be
           accompanied by a certificate setting forth the fact;
           nor upon transfers or deliveries made pursuant to
           an order of the Federal Securities and Exchaage
           Commission which specifies and itemizes the se-
           curities ordered by it to be delivered or transferred
            (provided that this exemption shall not apply to such
           transfers or deliveries made before the passage of
            this Act)) nor upon record transfers following such
Hon. Geo. H. Sheppard. Page 1, (v-648)                                      245


      transfers     or deliveries;     nor in respect to share.6
      or certificates     of stock or certificates  of rights
      to stocks, or certificates     of depos.it representing
      certificates    of the character   taxcd.by this Article,
      in any domestic       association,     company, or corpora-
      tion.   if neither   the sale,   nor   the order.   for.   nor   a-
      greement to buy, nor the, agreement to sell, asar
      the memorandum of sale. nor the delivery is made
      in this state and when no act necessary to effect
      the sale or transfer is done in this .state.. . .*

             Construing the entire act’as a whole, its seems clear
to us that a tax is not imposed upon a transfer which does not in-
volve a change of title or ownership, either legal or equitable.
This taxing act is similar to the stock transfer tax acts of New
York and Pennsylvania. ‘Both the New York and Pennsylvania
acts have been construed to impose a tax only on tho~se transkrs
which involve~a change of title. either legal or equitable. Iu prior
Opinion No. O-3765 of this office we held:

             ‘We therefore submit that a taxable traas-
      action or eventuality is created, under the Stock
      Transfer Tax Act, by either a~‘sale. agreement to
      sell, delivery or transfer upon thc~books and rec-
      ords, of shares or certificates of stock, or cartif-
      icates for rights to stock, or certificates of depos-
      it representing au interest iu stock, whether vest-
      ing in the transferee merely the legal title, or
      merely the equitable .trtle or beneficial interest, or,
      as m t.+ Fsuat msstance, both the legal and eqm ble
      right, title and interest.*

            WA ‘nominee’ is syaoaymous with an agent . . .
      and is one who represents and acts for his principal.”
      B. F. Avery & SOBS Co. v. Glenn. 16 F. Supp. 544.

             It is therefore bur opinion. if neither the legal nor
equitable title is transferred in the four types of traaskrs   iu-
quired about by you, and the transferee in each instance continues
to hold the shares or certificates for the same purpose for which
they were held by the transferor, that such transfers are not tax-
able.

                                SUMMARY

            A transfer of shares or certificates from
      the name of an owner to the name of a custodian,
      or from the name of an ovmer to the name of a nom-
      inee of a custodian, or from the name of a nominee
246       Hon. Csob H. Sheppard, Page 4 (V-648)



               of a custodia%back tic the name’ of ths owner for
               whom the ti&nineb had hgld the shuts,         or from
               the aanie ojl dniG&iiiea      of a custcidi+~ to tae’
               name of (Laotb& ~-tie         of tbti,s&6   custodian,
               or fr&m th&,diti:.of    ti nominee of,a custodian te
               the. name’df, h~i&iiiioe ‘of a i+w ‘c%stpdian’foi+b&
               sami. oivaer ‘ii’ p&:.$ax@l~ under thy Tees Stock
               Transfei Ta~~Aitf,~‘if ‘&dt&ei tbq legal nor ~eqoftable
               title, is transfii~dii and.th6 transferee in each’ini
               stance continues to,hold the shares or. certificates        .
               for the same purpose      for wbi+ they war? “ld by
               t.h&tmasfqor:                    “:   ’ ‘.
                     .
                      ;:        h’                 ~Ycnus very truly

                                       ATTORNEY     &NEIUL      OF TEXAS


      .
                                       BY
                                                  W., V. Cieppert
                                                     Assistant
          WVG/JCP


                                       APPROVED




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