        OFFICE OF THE AlTORNEY      GENERAL   OF TEXAS
                           AUSTIN




Honorable George Xi.Sheppard
Comptrollerof Publia Aaoountrr
Austin, Texas
Dear Sir:




                                          -8evonth L
on the r0ii0dng;
                                              perr0rm the oaring
                                              80 aoi&fxe the forma-
     tion at   that




                    son in thlcrState ongaged in the budnor
                      rurioe or partormi~g kayduty for othenl
                     (~1'01:
                           oompenration,dth the nra of any
    llefioe,tool8, inetrumentclor equipmenti,slaotrioal,
    meahanloal, or atherwlao,or by meaM et q     ehemloal
    slsatrloal,or meohanlaal p~)oers, I&W! auoh ae%~l6e 18
    performed in oonnootionti8h the osla@&tiBg of the oc~ine
    seat of any ~$1 or gas well a the rhootl.+gor aoi8ising
    the formations of nuoh well8 or the surveying or CastiM
    of the samb or other formationa  of the Wth   in ant muoh
Eonorabla George H. Shoppub, p0ge 2


      011 br gas wella, ahall rapport0~1thp 20th 02 saoh lPonth
      and pag to the Comptroller,at his ~offioein Austin, Tuaa,
      0n ooonpatl6.utu equal to t- md tyo-tsntha (2.2) pa
      oant of the grqaa amount rotpite4 rrom aald,srrtioetur-
      niahed or datg'periormed,during the oalendar month nut
      preoediag. The aald report ahall be ueouted under oath ,I,,
      on a form preagrlbed and turnlahed by the Comptroller,*
                                    hel& that wthla la a tu on ~errloe
                                 ." (Soa Attorn (hnudL*a Op!  liiii
                                   Q.) The psraona~tu0tPare thoar

of the aaaln% art
            0
             or other iornatlorm of the earth ti w.auoh             011 or
gas wolla."
               It.la 0le0r that it 0ny &at&       prrioiW:any   .ot atid
oprlr~tlona,    %owl~,   ‘o emuitlng
                                o r thc.'o*aing     la a ,”
                                                         ~“a h e o tla g,”
%oldlring;w ~~aofceyIcLg*  or %~aOinl,l.and oolleetamoney theraror,
8aid~Rpon aa io+fz&+a-&    5 liability i0r the tug ,a@, r, bdleve
it la al.80aleai-that~I? a p0raon prriorma ago other operation,
uhloh oonafltutasa aerv100, that la "in oenneotlanwith" me of
aald named o$e5atlonr auoh lertlor la bk~ao      ta.xablo. Ia oth0r
worda,an operatloq,doagnot hara to 30 one or tha, mmed aprratlona
to be taubls,~ but':itii taxeble ii it ii moroll~ *pertorre@h
                          the ncuaedoporatlona. yha oourta s
                      oonneotlonwlth*'a broad lntor retiatldh.*
Kokuaai Klaen Kabuahikl Uleha T.~Colunbla Bteyedacr  %g 60.~,23
Fed. Supp. 403. We be$lers that any lmlo r ,th t1s perfozmod
aa a neoeaatig atop;toward the prrfomoi      of or in fulfillment
OS, a partloular o sratlpm would bs oonaldero&a8 ba$ng dono
                  ii riaid partioular operation. In the oaae of
'in oonneotlenwit'*
   Ra br ld Oorporatlon of Oluater t. Rlahazdaon, (Sup. Ct. of
F&.)'l&lngo. 113, the oourt said:
           "In the oam ncRTbeior0ttbe00urt, tha rdtk 0n which
     'plaintifiia shuvn to hare be&n employed, and pormlt80d Or
     aufrrred to eagags in, waa the proourtient o? a lupplr of
     raw materiel for the operation oi.doten~ant~a8awmlJ.l.
     That work of that kind la to ba aonatrwd aa work 'a
     oonneotlonwith' any nil1 ia fullp a@talnod by the authari-
      I     ltho &h,0uob work waa note@otually done ia the ril.l
     lttyor    Gthln the ourt~lla&e theraof,~P .* (Unduaoorlng
t,
i




          ,EonarablaGaorga H. Shappard, pa&e 3


                       YOU? firat Question depmda on the moaain~'~ tha
            hraaa win oonnootionw1hn.F In Attorney hneral’a       Opinion
          iiP. 0-36Tt, v,      we held that *perrarating,w as that oparatian
           la ?rdInarilg one and understood,doaa nofpeonatituta*ahoat 1'
          and we also hold in *hat opinion, and wa noW hold, that the 83 '~
           in question does not a ply to the ordinary use of a ameaha&aal
          pertorator,w   bu% that I! t would apply it a Q~aohaniaalperforator*
          was used "Id oonaeotlonwith? One of the taxable oparatlona.
          X.bda?what was aald in that Opinion, we 'ballerathe aama ao
          would apply to *sun ~per?oiNtora* No Pddrratandthat ordiaully
          perforatingths aaaing la not d&q In a9nneotlF with a taxabla
          o eratlon,but la dona dalg for tha purpose or making hol@:r-    la
          t Ii
             a easing so that the.011 already thera nil1 flow ,lntothe wall1
          but, aomatlmaaparSoratIng 1s gone in oonneotionwith a tuabla
          operation. (‘See .*Pstrolewa Produotlan,” by Wilbur F. Cloud 1937,
          paga 388; WELamanta~ofth,aPotrolawa ladaatr~,*~edltad by i. ~8
          Golyar, 1940, page 229;,:-*,Vse  of OartiddtifallCoraplationY&Ma,*
          by George Webor; O~l~a:Gaa Journal (Maroh 17, 1938); and *Drllllng
                                                                   Oar Journal



           the atatuta. IIIthe aaao you aek about the aarrloo of parforat%ain(r
           the oaaipg Ed dqne, as a nrwaaary   utop .towardthd pu$armanoo o$
           aoldlzfng~tha.~~tlon.~..~,Xn   fa,ottha operator had the parioratlng
     ,     ddno In or#or to .qoldlaeeatthat 1~01, and, from what fou have
           adrlaad UN, w*,uudrratand that this putloular parfOrmn&        j@b
          was graparitorp   $0 aold~ilng. we think   th8 work 8s perforating
           the aaalng In this aa8a waa&ne "ln ~oonuaotlon   with" aoldlaiag
           tha rccmatlon,tiloh Ia,a taxable operatim. Tharofore, our
           anawar to your first question Iu that la the partleuhu oaaa
     ,$    rat,deabribe and ask about the work of psrfaafing tha oulag
      'E,. la a taxable aenloe.

                     Ua wl.ll~now~oonaldar  your asa& quadlon,'whIah aan-
         i oerna tho use of a gun parrarator in an opa.hole. .Waundaratand
     i .~i that the gun pelTorator is lrrere4   iato tha wall to a lava1 balw
     .,:-  the oaalng and that bullets are tired $nto the farmatlonfor the
           purpose of breaking u the sandstone, limaatan~ Or at&r ubatanoe
           and opallng paaaagoa sn the f ornation so as to stimulate  the flaw
           41 011 into the wall.
                     Aa heretofore IndIaabed,we believe that when l meahml-
           oal perforator or a gpn perforator la used ln 108 ordinarymannor,
           not In aonneotlonwith a named taxable oporatlon,auoh a aerrioo
           la pot taxable. The ordinary wnner of p erating a maohenlaal
           perforator or a gun pertarator is to use 9t ln euttlng, pun+rug
           of ahootlng holes In a oaalng so that 011 outalda the oaalzq at
Honorably Qeorge H. shoppaml, pago 4


that lore1 aan flow through raid holer into the wall. Wo ara
advised that the use of a gun parSOrator In an opa&??holo
                                                        la
very unusual. In Attornaj @aneral'a Opinion Ho. o-3627,
we quoted from Vundamentala of the Petrolsum Industry,*
Dorsey Hager, 1939, at page 235, as SOllows:
               "Shooting aooomplIaheaaaveral pur oaaa, apsolflaally,lt
               '1. Breaks up the sandstonesar 1L aatone@, oaualng
      ohannala to itim.
               "2. Opens passages to fracture    zones or to joint
      plaui)~, in whloh 011 may oaour.
               "3. Forma a larger ool.loolsl.ng area.
               “4.  Creates more seep-e apeoa in the hole.
                    Ozeates a vaau@mthat suoka l?,the oil, starting
      It throz     ahanuels into the well.?
In that opinion we duo quoted rraa the oaae of Texas Qamlto            Oil
~ompw T. ~illiarrm,  199 ag. ~6, 250 S.W. 818, as rouorar

              "It 1s a matter of ooamonknowledge that the ahoot5ag
      of 'an oil well la aona alwaia at a tia!ewhen tha wa&l la at
      or near oompletlon,or when the oil rand has been ruehad;
      tha purpoga being to looaeu the formttlon to tha and that
      the flor.or  011 MY be lnoreaamd.w.
We ballera that by the ume of a gun perforator  in an op+ hole,
whereby bullets are fired into the formation, It aarrea’t     pup-
                      Tudor the trrau of the statute *ah: lnp
r:   Exl~~~:~~:lo.                                    #
                          Our anawer to four aeoaud qwad  ibn 18,
that the firrag or bullota Into tha formatian or M oput hole
at a ~lerelbelow the oaring Is a taxable aerrloa.
              We hope that the SoregoIng haa answerad pour quaatlma.
                                         Your0 rorf ~4Aly
                                     ATTORNEY   Gl!X.BRAL   OF TKXtW
                       .
APF’ROVED   AUG?,   19&l
                                                d)    ““ILC;lGl~Zl
,(slgned)GROVER SEILWS
Fir& Assistant Attorney General


APPROVED OPIRION COMMITTEE
By B.C. Ghalrmau
O.K. G.R.D.
