No. 7484. | Tex. | Jun 7, 1939
In this case, the State of Texas sues the plaintiff in error, Utilities Natural Gas Company, to recover the occupation *315
tax provided in Article 7060 of the Revised Statutes as amended in 1936 (Acts of 44th Leg., 3rd Called Session, Chap. 495), which statute, as amended, will be set out in this opinion. The case was tried without a jury, resulting in a judgment for the State. That judgment has been affirmed by the Court of Civil Appeals. (
The facts are undisputed. They are set out in the conclusions of Law and Fact made by the trial court in the following words:
" 'Section 7: Use of Gas: The gas supplied under the terms and provisions hereof shall be used solely on the said premises of the Power Company, and shall not be otherwise disposed of or used by any other party.'
The statute under which the State seeks a recovery reads as follows:
"Art. 7060. Each individual, company, corporation or association, owning, operating or managing or controlling any gas, electric light, electric power or water works, or water and light *317 plant, located within any incorporated town or city in this State, and used for local sale and distribution in said town or city, and charging for such gas, electric lights, electric power or water, shall make quarterly, on the first days of January, April, July and October of each year, a report to the Comptroller under oath of the individual or of the president, treasurer or superintendent of such company, corporation or association showing the gross amount received from such business done in each such incorporated city or town within this State in the payment of charges for such gas, electric lights, electric power or water for the quarter next preceding. Said individual, company, corporation or association, at the time of making said report for any such incorporated town or city of twenty-five hundred (2500) inhabitants and less than ten thousand (10,000) inhabitants, according to the last United States Census next preceding the filing of said report, shall pay to the Treasurer of this State an occupation tax for the quarter beginning on said date equal to seven-tenths of one per cent (0.7 of 1%) of said gross receipts, as shown by said report; and for any incorporated town or city of ten thousand (10,000) inhabitants or more, according to the last United States Census next preceding the filing of said report, the said individual, company, corporation or association, at the time of making said report, shall pay to the Treasurer of this State an occupation tax for the quarter beginning on said date an amount equal to one and three-eights per cent (1 3/8%) of said gross receipts, as shown by said report. Nothing herein shall apply to any such gas, electric light, power or water works or water and light plant within this State owned and operated by any city or town, nor to any County or Water Improvement or Conservation District. Nothing herein shall be construed to require payment of the tax on gross receipts herein levied more than once on the same commodity, and where the commodity is produced by one individual, company, corporation or association, and distributed by another, the tax shall be paid by the distributor alone.
"No city or other political subdivision of this State, by virtue of its taxing power, police power or otherwise shall impose an occupation tax or charge of any sort for the privilege of doing business upon any person, corporation or association required to pay an occupation tax under this Article, provided that nothing in this Article shall be construed to prohibit the collection of any tax now imposed by a franchise, and provided further that this Article shall not affect any contracts now in *318 existence or hereafter made between a city and the holder of a franchise."
1 The main object of this statute is the laying of an occupation tax against those who engage in a business of the character defined in the statute. The subject matter in respect to which the tax is imposed is a business bearing the characteristic marks specified in the statute. With reference to the business of a gas company, these characteristic marks include, among others which need not be noticed at this time, a gas-works located in any incorporated town or city in this State which is "used for local sale and distribution" of gas in said city or town. The question in dispute is whether or not the portion of the pipe line, belonging to the plaintiff in error, which lies within the territorial boundaries of the City of Victoria, constitutes a gas-works which is contemplated by the statute. The contention is made that it does not, for the reason that such pipe line is not "used for local sale and distribution" of gas in the city as the statute contemplates. The determination of this contention requires us to interpret the language just quoted from the statute. We have no doubt that, under the undisputed facts, the portion of the pipe line involved is used by the plaintiff in error for effecting a "local sale" of gas in the City of Victoria, but we are not convinced that same is used for the "distribution" in the city of the gas sold. A conclusion in this last mentioned respect depends on the meaning of the term "distribution" as same is used in this clause of the statute. It is claimed that the Legislature used this term as meaning the same thing as the word "delivery" or as the word "disposal." If such be true then, of course, the sale of gas by the plaintiff in error to the purchaser, the Central Power and Light Company, which was concluded by delivering the gas to said purchaser, in the City of Victoria, by means of the portion of the pipe line in question, included a "distribution" within the meaning of that term as used in the statute. But considered in the light of the provisions of the statute, as a whole, we have no doubt that the simple fact that a delivery of gas is made in the city, by means of said pipe line, to a single customer, and to nobody else, was not intended by the Legislature to be comprehended by the term "distribution" as used. This term as used does not mean the transfer of the possession of gas, by means of the pipe line, to a single purchaser where such purchaser is the only customer to whom the gas company sells gas in the city. It means the transfer of possession of gas to various individuals or concerns *319 in the city. Any other construction of the term would, in our opinion, involve a departure from the legislative intent.
2 Since, therefore, the use of "gas-works," in a city or town in this State, for the distribution of gas in said city or town is, by the statute, made an essential characteristic of the business taxed, it follows that the business in which the plaintiff in error is engaged, as disclosed by the undisputed facts, is not subject to the tax which this statute provides.
The judgment of the trial court and that of the Court of Civil Appeals are reversed and judgment is here rendered for the plaintiff in error.
Opinion adopted by the Supreme Court, June 7, 1939.