                       AWSI1N    11. TEXAS



                     December 19, 1962


Mr. Robert S. Calvert                  Opinion No. WW-1503
Comptroller of Public Accounts
Austin, Texas                          Re:   Whether receipts from
                                             certain transactions
                                             are derived from "busi-
                                             ness done in Texas" for
                                             purpose of computation
                                             of corporate franchise
Dear Mr. Calvert:                            tax.
        You ask the Attorney General whether the proceeds from
sales of certain petroleum products are includable In the seller's
gross receipts from Its business done In Texas In ascertaining the
seller's franchise tax payable under Article 7084 and Chapter 12
of Title 122A, Taxation-General, Vernon's Civil Statutes.
        The controlling facts are:
        1,* The taxpayer Is an independent oil com-
            pany chartered In the State of Delaware
            with a permit to do business in Texas.
        2.   Its principal office is in Dallas, Texas.

       3.    It has refineries at Corpus Christ1 and
             Port Isabel, Texas.
       4.    It does business in several states and
             several foreign countries.

        5.   It maintains sales offices, bank accounts
             and numerous employees In at least three
             foreign states.
        6.   Many of the sales of products from the
             two refineries in Texas are initiated by
             the company's sales representatives working
             in states other than Texas.

        7.   Payment is generally made at the buyer's
             place of business outside the State of
             Texas.
Mr. Robert S. Calvert, Page 2 (Opinion No. WW-1503)


        8.    Passage of title to the petroleum pro-
              ducts passes from the taxpayer to the
              purchaser F.O.B. the loading points at
              Corpus Christ1 and Port Isabel,
        Our answer to your inquiry Is that the proceeds from
the sales of the petroleum products under consideration are not
receipts from "business done In Texas", as defined in Articles
7084 and 12.02, V.C.S. They should not be included as gross
receipts from business done in Texas in ascertaining the fran-
chise tax due by the 011 company.
        The sale, transportation and delivery of petroleum pro-
ducts from the refineries at Corpus Christ1 and Port Isabel to
points outside of Texas is clearly Interstate commerce.
        Article 7084, V.C.S., imposed a franchise tax for the
period of time under consideration beginning with the year 1956
to September 1, 1959. It used the phrase "gross receipts from
Its business done in Texas", as does Article 12.02 of Title 122A
which supersedes It. Article 12.,02of Title 122A, Tax.-Gen.,
V.C.S., effective September 1, 1959, in Its pertinent portion
states that,
                       the term 'gross receipts from
             its business done in Texas' shall include:
                "(a) Sales of tangible personal property
             located within Texas at the time of the
             receipt of or appropriation to the orders
             where shipment is made to points within
             this State,
                "(b) Services performed within Texas,
                11
                 . . .
                "(d) All other business receipts within
             Texas. . . .'
                (Underscoring added.)
This phrase "business done in Texas" was defined In Clark v.
Atlantic Pipe Line Co., 134 S.W.2d 322 (Civ. App. 1939, error
ref.) to mean,
           11
            . . . business begun and completed In
           Texas, and not business begun In Texas
           and completed In some other state or
r   r




    Mr. Robert S. Calvert, Page 3 (Opinion No.       WW-1503)



                    foreign nation, or vice versa. In other
                    words, that It means intrastate business."
    This definition was subsequently used and approved In deter-
    mining the decision In Flowers v. Pan American Refining Corpora-
    tion, 1% S.W.2d 982 (Clv. App. 1941, error ref.). The facts in
    these two cases were very similar to the facts under consldera-
    tion.
            Texas has no statutory provisions authorizing apportlon-
    ment of receipts from interstate commerce for purpose of state
    taxation as exemplified in Rock Island Refining Co. v. Oklahoma
    Tax Commission, 145 P.2d 194 (Okla. Sup. 1944 ; El Dorado Oil
    Worksgan,          215 P.2d 4 (Cal. sup. 1950 .



                                   SUMMARY
                    Receipts from the transactions considered
               are not derived from "business done In Texas".
                    They should not be included as gross receipts
               from business done in Texas in ascertaining the
               franchise tax due by the corporation.
                                     Very truly yours,
                                     WILL WILSON
                                     Attorney General of Texas



                                             W. E. Allen
                                             Assistant Attorney General

    WEA:pw
        APPROVED:
        OPINION COMMITTEE
        W. V. Geppert, Chairman
        Norman Suarez
        W. 0. Shultz
        Cecil Rotsch
        REVIEWED FORTHE ATTORNEY GENERAL
        By: Leonard Passmore
