            OFFICE   OF THE    ATI’ORNEY     GENERAL       OF TEXAS

                                   AUSTIN




Boa. Oborgb H. Shb r;brd
O~tFdler        Of   Pub P10 AOo3ttil
Auatin,     Tmxas



                             Oplaioa    lfo. O-3012




            Tour lattar ss Dbo                            requbrtr th* opinioa
of bhl8 dbpertmbat                                          artruation on4
8~pllabblon   of the
eaundod     br Aotr 19&
ootlltlod    am Artiol




                                                ion approve4 b the Soeuri-
                                                  00 bho px'ovifi 1 cm@ of the
                                             of 1935,     four  oubridiary
                                              diarolvbd      aad frwuforred
                                                             all of the ltink
                                                              oomp8nj.    Thlr
                                                              ho bus inuoor
                                                                 orated br tba
                                                                lo b mb o 31,
                                                                          r
                                                               i" *ll of luoh
                                                                  b\sr;lnesr    10
                                                                  levied   by
         You wek our 6drIo0 68 ta whothe? 6ho sow 0orpor6tlon
la aubjoot to tbo tax @m80& by Ad.10   7060, V. A. C. a.,
oalouleted   on the baa16 et the aulunt ot buain668 4660 by ita
predesesaora   in mvn0rahlpor whothor it is aubjo0t only to the
tex imposed         by   Artlol0 7073, R. 0. 8.
                 Artiole    7060, V.   A.   C.    J.,      reeda,    In part,     06 follovmr

                 -tiob indItIdu61,octapa6y,oorporatlon,OP a6oooIatIon
         oming, oporetla(r,   unaql6g, 0P 00ntrollIn(l66y earn, rloo-
         trio l&ght, 010atrIo pOuOrr or rater works, or w6t.r aad
         light plant, loo6tcb wlthln lw Ia00rporat0dtown or olty
         In t&la St6to, 0M used for 1006l 66l0 and dI6trIbutIonIn
         6614 town or alty, and oh6rSIag for luoh g e a l
                                                        r l@otrIo
         lIghta, l1ootr10 p0u.r or lmtor, ah611 uko Qu6rtor4, on
         the iirat day of January, April, J\ilr and Ootoberof laoh
         year, a report   to 8& Cmuptrollrrtmlor oath of tha lndl-
         riduel,   or or the pr0eIdoat treamuer, cw rsp0rIat0ndont
         of arch oomp6ay or oorporadon, or eaaooi6tIoa ahariq the
         &roar     nount rooeirod      from      auoh buainoaa         aono in     laoh anoh




              Thm ltatuto turthar #rorId66 that tha tax thrtrin
lovied     aball be a oertain perooatr~4 of the @a66 raOOipt6
8hown by auoh report6en& provide8                       tht ths tax         oh611 be gm3-
uat6d 6ooordImg to the populatioa of th@ aitIO6 Ia uhlah the
buolnaaa la oonduotbd. You will noto that   the kei616tur6 h6a
06ll6d thla 66 oooup6tIootax.    Th6 Bupr6a6 Court baa hold It
to be au6h a tax. UtilltlorRatwl @aa 00. v. Statr, 136 S. 1.
(26) 1153. In that oaao the oourt aeldr
                 “The ~lo    objrot    or this          rtatuto        theIa~lms or 6n
           au at on tax against         those      who ongage In 6 burlno          o
         Q.fi6ea                in th6 lt8:ute                      “,6 aubjeot 66ttfr
         In rcap0at to wbleh the tax 16 impoa;d is                      a     bualaeaa   bear-
         lag tht oheraaterlatlo  mark8 apoaifI0d la                     the     atatuta."
Eon. Qwigc           11. %h*paard,      pago 3


                Jfaaemarlly,b@forb tha tu        ean be oaluul&ted U&T
tha prorlaIoaaot Artlole7060, thuo wt                 have   boon aoae ro-
aolpta    from bus:neaa aa0 during the preooalng     qurrtu.     The
statute     thua pnauppoaea the exlatonoo    nnd opemtlos    of tho
bualnasa boforc 106 terma boooma offootlvo. To rem&y this
aituatlon     tha Lagial.atwe  enaotd Art1018 7073, R. C. S.,
arbitrerilr      fixing a tax o? $)O.OO upon the oponto#a     ot bual-
nbawa whloh wsra bo&m ld punuod on or af8.r t&o llret             $ay
of any quartarlr     tax peyumt data, ior tha prIrllo#o      of
Ing in luab buainoaa far the first      guertor &arlu whlah 8   T- ‘h
baalneaa *rlsta.       Art1018 7079, R. C. &., reeds 86 followor
                *If   ma y
                         ina ivik ua  o o l,
                                          mp a a ly,
                                                  orporrtloa,firm or
         aarooiatloa,    in this ahaptor rurtioned,     aba3.1b&a antl
         ongase la say bualn~aa for whloh thoro is mn oorupatioa
         tas horala lmpcwti, thorn,    ana in all lwh oaaoa, the
         amountof mush tax fer arid boglanlag quarter ahall bo and
         is hereby fired lt the sum of ?%?ty dollera, payable to
         t&a Stat0       Treaaursrla dvaaoog bu8 for the sort lwo o o d-
         In& qurter,  and lilt other luo o o a 6Ia    g
                                                  qwctua,     tho tu
         ohall bo dotwalnaa br npwta     te *ho Oomptmllor of tho
         buaInoaa for the pmodlag quartet, or part thoroof, u
         horain othotiao ln this ehapller proriddf      8aa report*and
         -to      of such tax shall  be amlo atrbjbat   to alL e&her
         provlaioaaof this 8hapter.w
           In aenaldorlng   tbia pneatioa it 1~ noaoaauy to boar
In rind the twt    that cm abrupatloa lioowe nay k trautortwl
by the llaonuo.     Art.  7059, R. e. %.a t&at mpna wad       In
a bualaoas roqtirad by the 1-a of this strtr     to pay a tax
upon gross r*aoIptr1s require& 8s have a pumlt to
auoh bualnasa, Iarued by the %eo?etwy of Btato, Art.
R. c. 5.; 8nd tbst the applloetloafor auoh a per&t               mat   &mu
~that the applioant h*a pai6 the @roam ro8olptataxu               puorlbwl




Withoriaaa          appllaant    to la&w$e la thr bualnerruntilDeooabor
)lat     or   the    yeu   in   wbiab it is iarued.
           k quentlon airilar  to tht here us&r oonaidoration
ma dlsouaaod    in an A4~orney Qoaoral*aopl~ion under daba o?
tievmmber 16, 1915. That able and manfully    ooaaI&rroa QpiRiOU
uaa wrlttm   bJr PaaiatlatAttorruy QuWd     61 W. Tarlop lad lp-
proved by AttorneyObaeral B. P. Looser.     l%o quc)atlon *bar4
treated  was whether Artiele   7385, 8. C. 8. 1911, whleh la our
present Art1010 7073, R. C. 8., -8      appllosble to on0 who pur-
ohaaad a goln(g burrineaa prior to the tax paymat date, auah
business   bring one whleh was requlrod to pay an ooeupation   tax
baaed on &rose meal pta.     In holding  that the meld rrticle was
not spplloabls,   the Attorney fmaeral arid:
            *f.eall tams upon grora xeaelpta mder the ruiow
     l~bdlrlslona     or tbla Xot are baaad upon the amaunt     of
     bualneae done for the preceding       quarter, it ia madteat
     thet at the bqglnnin(l of the business, there beln$ no
     $roaa reoelpta      ?or the preoedlng quarter,no tax eOUld
     be baaed thereon and as auoh tax le Sor the pririlage         or
     ongaging In the oeoupatlon       to +th elaaauUng   guuter    it
     neeeaserily    followed   that them maat bo fired w statute
     8080 arbitrary amount to ba pa1d.u a p?ivix~e ror angag-
     i116In the oaoupatfon for th@ baelnningquarter.
             I. . .
             “The     tax   baaed upon           roaa rooelptafor the preoodlng
    quarter,        being    an oaeupat f on tax,        mad the faot that the
    beglaning         quarter      tu    of    titty     boll&n  la lwlod a# an
    arbitrary         amount for        the ruaoa         there wera rpogross re-
    oolptato ion, t&e baa18 for much tax for e                                    preob~io(
    quarter,we tbiaik would be ruffleloat pouada                                    for   a ml*
    that     a purahuer         of a bualner8 upoa rhieh                    the     tex   has be*a
    mid      would rrueeowd to the               r&&t:        oi    t’:
    the buslnras without tbs payson  oi
    Howaver, we fhd in Artlole  ?jbb P                               S
    N. c. s. 1925) dealing with the ioe;pai
    Artlole 7355 (Art. 7047, H. C. 9. 1925) tha authority to
    oonrey the unexp!ired portion ot an oecupatioa lle~aae, . . .
             “Al-tiol.      7365    (Art.      7056,     R.    c.    s.,   1925)     authorirea
    the     uaigtme      or purebaser            of an uaexplred    oeoupafloa                lioeaae
    to     pursue     auoh ooolppttlon           upon the eon4ltlon     thenin                MB&.
             UT&w (ass          meipt         tax levied br tha artfelea                  of ltatuto
    under Uaeuaalon,     being an oeoujnUvn   tax,  the SWOelpt  iSSU@d
    upm th6 payaent thereof,      rbfl* not In ths fora ot a lleesiae,
    la in raet the authority     and lloeaae mate4 by tha etate to
    pwsw the oaoupatlon       Sor the auooesdin(ll unrtor.   While the
    two artlolw     last amad WIN enaotrd ln 1 8 85, long prior to
Xw.     Oeorgo H. Sheppard,        page 5


        the enrotmnt      of the
                               gross rooolpttax 8tatuta yet a8
        the ehanotrr ot      taxationunder the gross rueipt law la
        the same as thet ;IL1dorwhat is known as the oeoupatiofl
        tax  statute,  m tblnk the twa la tter  lrtlel~a quotadharr
        applleatlon   aad that the right aequlml by the pa-at
        o? the @roar reoeipt        tu   la tmaa?wable   w&dewthese
        lrtlel*a.




         80 think the aboro qwtatloa rorrwtly intorpmta
tha lktuto bon under eonslderatloa.   That statute,i&t. 7073,
a. 0. 8. h a so tb unuunUed lino e  tkn & a t*
                                             o fth a otp lnb a .
10 pwaehe 84 ruaoa   why the saw rule slwuld a00 apply to
the tupayor who pwaJuau e bualnoaarubjaot k, the groao
xwaipta tu on the flnt   day of tbo tu quarter”, that ueuld
apply   if tb purohaaok amb on my ether Qy dually the
quartor.

             It   la true   Wet in tba eau under roasldwatloa tlm
taxpayerlaqulrwl  m         p~lrileaato traaaaot buaiaoaaduring w
part of the qunrter.    Its pr~d~aaaaora ha6 llroaby ruad up the
privllogew,aiohthey    had pali ior* ~Tho only dlr?oronoe in the
two eases fa that   ln tha ease then kforo the Attornw ~aoral
the taxpayor’a protlueaaora,   by dolag bwlaerr far a art of the
quartor,had              laid the bash of taxation, rhfIO hwe
the taxpayer*8
             =3= pm ueaaw8, by doing bualruaa twhout         the
quarterbefore the taxwing data, ham                 +mld thr basis
for lrrlrla@ at the oorreet ammat of                 pdrllege of
dolu bwlneaa        for   the rwoobdlag qmrter.
                Am polated      out   in   the opinion     fro% whloh we have
quote5    the arbltarX fi6IWO of rwty                    dollars
                                                      fa lwfod for
the pdrllwe of             ring in 1.n bualnesa because tbara would
otheruiae              “p a for ooQlo:,
                bo no bsa           4-f a ioa a? the tax, there bqlng
80 gram8 reeelpto  upon whioh to oalouls8c   the tex.   %a& la
not the ease lam.    The gross rboelpta of ths bualaerr for the
entire  preceding gusrter are kmwo.     Tbop conatltuta  the moaauro
iron wblob tlw t&x 18 to be oaleulated.
          Your lttmtion    is dlruotrd to   the raot t&q&&rtlola
7073 l8 dlrwtod to O&ma@taxpayerswho “ahall be-              eaglgr
in say buaineaa . . . OR or after the ba@xmlng dat, &‘~‘tho
qwrtar for which aaid tax la lapomd,      thm and in all muoh
eaau,  . . 4 so that    if the opinion0s httonaeranord boner
b oomot as to tbo levy of the tax wham tbr bualnaaa was
               r tb8 bagiaaln(l
p u M h a 4 .b l                day of the quuter for whleh the
tax la 131p084 , it must,
               37          for the aaab rearnow, be aonsot as
to t& lety   of the tax Hera the buainraa wan pwehaaed s
the bo&u!ltq   &Ry 0s the quatiw.

            pkruver,        we would poinO out that on8 who pwehaaea
aa aotabl1aBod        bwtnekm,   wh;rh la sub eet to the pwoiolona   of
ArtSolo7060, V.          h. 0. 9.. do** not in any oven*, beeem aub-
Jeac to the pawvlaiona 0s Artlao 7673, si.c. 8. This Aa true
bemum he dtna not “bagla aad engage la . . . say buaI~eaa.r
It may be that he has never %a(r&ge$ :a* the taxed bualnua
befow .    r? su,     and if, aftor
the Opuatba         of the buria488
The pumhaaar        of an eatabliahcd
aay buriaeaa*       though he nay thsroa?trr             cn@qe la thrt bu&a~,
and   pwauo that oeeupatiqm.
               To lbqla* warm aisply WtB) start* or “to lnitl~to”.
To be&n       a bwtiesa,    as wed in thh    statute,    we think  mana
‘to lnltlate*     or “to atr,rV that buakmaa.         Tu vmgaao ian the
 business oaanaOw        a onatinulty  or Op+IWl+im or mrarrlt of the
 bwinoas.       I% iawe wlthl~    tbr tcrw o? hrtiole     !Q73, R. eJ.%. ,
the taxpayer muat both *begin an3 emgage ia* tha bu&tea6.
The raot that ahe tarpyear never kwforr *eri&?upl law the bwlneae,
or that, as ia this eaae,‘thotaxpayor      never before ULated,    18
beaidb tbr p&at.    When he aoqatrer’an    established    going bual-
mea, he doea not nbeglnmthat bualnssa.         It has airu4y   bmoa
initiated  aad will oonttnw    to bs a going ao5eera until 59. auau
to be a buainasa.            onott begus,    it   mm never again    be   the aubjut
0s lnltlatory       8top8.      It    oan barb oaly one b~&knln~.
            we therefore   advi8e rma that Artlole    7073, R. 0. $.,
la not lpplleable     to tbe purahamr of e &~inq buuine88, rhloh
Is 8ubJoeb to the provi8lon8      oi rstlole  7060, v. A. C. S., but
tDet   the t*x rhould be oaloulsted     on tha bar38 of the grosr
reoelptn   of that bualne88 fros bu8ine88 done during the pre-
obding quartor, in 8ooor5m1oa with the protislanrci *al4
Mtiole    7060.

          iohile under our view oi thlu mttet, the iaot l8
imaaterial,it 18 lntere8tltwto noto that tho record sub-
mlttrd to w, thou@ lt r&loot8 a ohao~a in oorporetoareal-
srtloa end name8 doe8 not lodieatr  that cmy ohange in t&o
ultiante owner&             or control of tJm bwslnerr~ involved has
tmken phh8c.         This                                  were other-
                            being trub, even Lt the rctntute
wlw lpplloable w think   t&at thlr taxp or oould not beh
8bvant;yo    the p~orlrloa8of Artiale37 73 53. 0. 9,. buQ
              or
would be eubjoot to the 9rovlalal8of Artloie7060, V~.A.O.tX.,
liaoo     it uouUI    be wmtlaulag      tha opentlon   of ths             mesa bu+i-
aosueu     under   a differentINU        but for  t&w ultimate             banriitof
tho maae iadlvidrul8.
              ft hi  boea oelle4        to   our    8ttmatfos-i   that     two opimioaa
of r0rwr      Attoraedy8 fkeneral      nro in ap        teat   oonfllot
                                                        wlibh thi8
                  dabed khy 8 1924 br &essbd 80 Han. Len A.
              Oam 18
~ti!?oaptr~llu       and biga; by i 3 8mglor       Alui8%asS
Att&by    Geaerml. *The other f8  da&  jobmary   1.5,1.928, ad-
br08rd to XL% 8. a. Tomll,       Oomptrollorof Publfo AooouQt8,
8lpr.d bf Pwl D. Pago, Jr..   ksdetant  Aittoraey Qmonl      ead
ajgsrovml by CLmda Pollax'& kttoraer fba         These opialoms,
larrolaras th& datomentr therrla oontdm'zp'ire in ooafllot
with thlc~opinion,are hereby es~roorly ofonrled.
              Trustlag      that   tha above   tully     anrrwers tour       lapuizy,
w   are
                                                   Your0 wry      truly
                                             ATTCWEY     O~2AL      O’F TEMS
