Case Information

*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS

AUSTIN

Honcr3bls Sfdnry kthaa Sscratarg or stat8

Autln 11, ‘Sexa8

War Sir:

Lo are or the aorporetion, through their questioned our zmthod of ooa&iutlng :ExL"P" mount of 5% th8 iranahiee tax for aaoh 3o::th or rm0ti0a part of 43 mnth, as provided ror in .irtlala 7092, iL C. S. 1925.

-It has been ths pra&4~8 ot thle depert~aent :O c3.:puta the’ 5.5 on the axouut of tax due, for whloh t3x the right do busineee was rorreiited, each ;c:lth of tk6 rorralture even though the rorreitura It has also been the :..:c run for aevsral years. to compota the additional 55 on the tax

-~actlce i.ccrulnc~ in subaequcrnt years tram ‘itip lat ot sash pear to date pays3nt.

;;arjombl8 SidnaT'Lsthaa, ~888 2

*Your damrtaant, Opinion MO. O-72, ZJoYexibar 22, 1939, hrld t&t the 5% drrlgnatad 88 l MYiMl ia8 ror th0 entire period 0r rorraitian should b8 aoltot8d cjnt5.l th8 roorurd tax and prnaltlrr ar8 paid. Tha rrt- tomay ror the oorporatlon har aoaordrd this math04 that is probably oo?raot, but rhould apply only to l mouat 0r tax dur r0r whLOh thr torr8ltan um8 drolmd, and Um8S th8 fee lhOUld be 8180 OO%putd On th8 fMOOhiIi8 t8X88 that it iO SOt OOOt88Ipi8kd h Arti& that acox'~iag in 8Ubtl8~8Ot 788M 8Ob whloh lUllsilt Onpaid.

It 1s conteadrd, t,hrrafOn, that tha OpiniOIl Oit8d dO88 cot nnawar thle qu88tloa. rr8oOhls8 tax law8

"Xt 1s ierthar urgrd th8t ara pur8ly r8v8nu8 meenur88 sad that thr plmlty either late r8turn or let8 paymat 18 erknt or th8 -~.:teta*s rraotlooa aft8r.rorr~lturr and th8t thr r8rivel .~ S88 ap3li88 wholly to thr l maat or tar dU8 at th8 time Your opinion, th8nfOr8, Ir MqU88tad

or r0rr8ikr8.

on this quertloar *(should a oorporatlon whom rl&ht to do bueiM88 3, 1941, ror rallw8 to pay =.15 forrrltid en s8ptaab8r .a>balanoe Of frtX1ch18. tsr ~8OOnriOg &%y 1, ~19& and whloh oorporatioa 1%rilllng to .@a~ the. -5%prr Moth im raid bcilandh~,' tor~vitdch~~tat ltr right .to do paaelti btlein8sa.we8 iOrt8itad, b8 r8qUiMd to wf ^[55] glF'-nth ._ rrrita1 r88 oath8 muohI8r tar88 8oorulPg on kfay 1, and &tar 1, 19451, rttrr the r&ht

19Lz. May 1, 1943, Oh tipisxbrr 3, 19bl” to ,do buslnars was rorrrlt8d I'& fOMgOiag 8itMtiOO i8 Clo+.rO8& by th8 &WOYi8iOn8 Or Chapter 3, Title 122, V. A. C. 3. 1925, and the 8pprOpriati 8tatut88 will ba au.arizad auiilOl8~tly drY8loop tha oontrollIn& qU88tiOa without ssttlw thea Out IO full. (al rmpbaais OUTS). It ia provided *%orpt aa herein provided, that;

all oarporatlon6 now requlrsd pay aa a~~::ual fmnQhi88 tax shall., batman 'January 1st and Usroh 15th of l 0h y$ar, 35~.v.a a #worn raport to tha s;aoratsry Or atots - - s:\onisg its condition on last day of th8 maeding ya:+r, in dsisult of which rrport it shall be ikbl@ f:r racslty or 10s ths a.aount or th8 innohiso tax due by gush corporation - - - cogrthsr with its iremhla*

R Art. 7C89, FL ? 1925, as amndsd by Acts 1931, ::i h.iJ. j?. Lkl, ch.-i65, 0 2. Varnon'a A00. CiV. St. ..rt. 7C89. *3 .

.: :;:>i>;,j :,?dns9 Litha ., :t is FlWid4d that, *8xcapt 04 hanin provld4d, _ - - - 4OrFOl%t~Oll hsr4tOfOr4 Or b8N- rl7drr doatwtla rifter chsrt4rrd or autborizad In Tama, to do burlma shsll, oa or boiora Uay 1st of rach year, pay in ad- van48 to tb~‘Seor6tary of Stata a rr4anohl84 tar ror the year rOllouin&* upon the nport to ba aoqutrd Its oondltlon rrqulrrd in Art. 7089, oupra. Art.

7C84 il. 3. 1925, PI swndrd.by hot8 1941, 49th Leg. 2i9, Ch. 184, AHi, VSII, 6 1, Vornoa’8 Ann. Clr. P* \. -h-t. 7084. t. it Is protidrd that ii *any do5ratlo 4orForot~O3

:ir.411 isi1 to $4~ the tar provided Art. 7084, aupm, :han due as provided, it shall br liable for a pmalty oi 25% or t&a of the delinquent tax, end ii .-rid tax and canolty br not paid in gull by July 1, tksreartar, corporatloo shall rorr4it ita right do boslnre~ Taca, such r0rrhhm to bs sirrot- Eated by 34cr4tsry Stat0 8s therain provided, 3f t-r notlor ) ond corporation shall thrnce ror- mrd br danlad tha right bring Or dalend suits in+Jm courtr oi th4 3tat4, ualssr Its to do right ~bueInsaa ohall br ravlv8dw (a8,FrovIded In Art. 7092, \ now. to, br notload). Art. 7091, R.. + ?9?5.

It is provided In Art. 7092, 8. S., 1925, ab fol- low4 : Vho tharrtary or Stata, shall during t .4 aoath or %y or rash year., notify oaat do-mstla and rOr8lgn to a franat&o oorpomtlon whI4h iuy br or bscom subject any law or this Stata, which haa fallrd taqundrr to p%y such frsnonlse tax on or bsrorr thr flrat day of Ysy, tL:;lt u.a.le~s such ov?rdua tax tovathsr with aald p4mlty tf:sreon ehall be paid on before thu first d4Y 0s the rIaht of euch aor?oretIoa to ;ulg mxt tollowing, In tt,Ia State will be tOrS4ItOd wlthout do susitis~s judicial aocsrteinaeat. --- Any oorporation whose rieht TV do buaineaa ?ray have been iorf4itad, as provided In t.hIa dhaptar, shall ba rrllavrd fro5 3LOh forfritufr by royl~~ to the ::acrrtary of Stats ally tizs Within the lull alount 0f oil 3oft,hS after such forf8iture T,:;~ ~~r~~r~4h.is4 tax md Fsnalty due by it, toq4thor 7iit.h 0.7lCltllt Q! fiva per cr::t of nuch tax for 3~ a<lditioE81

saoh month, or fm4tiOn81 part Ot l zmonth, whloh rho11 alspsr artrr ruoh rorr8itunI provid8d, th3t auon afuount ;ihsll In no cm3 b8 loa8 than rlv8 dollara. Y&on such tax sad all p8naltlrs ahdl ba fully paid to thr Seara- tory or Stat., hr ahall rsvlvr th8 right or the oor- to do buelnosr within thlr SSatr by aanoolllag ?oration the words *rI&ht to do buslnssa rorrritrd,' upon rhIa tbr word, *r8riord,~ and record and~rndorslng thrrron cha datr of auoh rqvlval. lr any domrntlo oorpofstIon ~hos8 rlfiht to do buofnres within thlr stat8 aLal hqm- after he rorf8itrd Und8.r the provfsioneor thla OhSptar fall to pay :;scrrtary shall of Dtata, on or before :>i rlrst day or January ncrt rollowing the rav$val, thr amount8 nrooeaarp to satIt (rorfsitur8), it to kre its right to-do busi~lrss rsrIvsd under thr provl- sloae, of this chapter, such iailurr ahall ooartltuta ~urfici8nt ground for th8 rorrrltum, by !ud&m8nt or my oourt of oorpatont jurlsdiotion, or the ahdarter of auoh dossstio 40TpOratiOn.~ Art. 7G95: *Tha Attorney And It 1s provided

~? . . ..!:enersl &all brlng~sult th8rrfOr agcllmt 813~ aor- ;oratlon which msy b8 or broom tC or lisbld rubjeet for any ?ranahIar tax or pmml:yAund8r law; and, this in 43~ there my no% b3 or shall haraaftor rrlat valid or thr ohartsr or e~y COxE8stlQ Crouoda ror the forloltur8 or tailcra So pay any rra~ioniaa tar pfitatb oorporatlon, taxes .or pec+i.ty or Faaltios FhI4h it or franohlar any &vr b4oom or shall hsmaLit@r be beoomr mbJ84t or llabla under this or fOraIm law, ho shall bring suit for a forfsltura suob 4hsrtW. ---* a8 roiiows: part

Ia your raquaat you state n--m,, “It has bqan the praotloe this U8;art.33nt of to

00 ;3u t6 ehs 5:; on the of tax due, for which tax t;;3 right to do bualnsss was forfalted, for 3aOh month or tb3 :0rf3it,ur3 3~30 thou+ Chs forfrliturs has Pun It hss aloo barn the gmctfcs fcr ~evaral yaara. to COW-U~~ th3 additiocal 5F oa the tax accruing in sub- s?,.;osnt years fron ::.ay 1st 01’ qsch mar to data of -.:.y-.jnt, - - en

282 ;;axrnbla 3idnry Letkm:, page 5 drpartmnt, Ho. o-72, sorsaber The opinion of thir

- . . “~4, :‘)39, approved drpartaental oOnatruOtiOU tharatofors umd of Stat0 60 to thr ohargo oft fire par by ~or=ot seorrtarlrr witi mar month on tha unpaid tai for whhioh fallurs CO 31 right do burfnaor maa forrritad, ror asah ~-100otb of ~h0 rorrriton won thou* thr rorrrltan hrra run ror *row31 ,::‘:ra, but the opinion did not oovrr tha qUr8tioo a8imd the caaa alnor no nqurat ma udr thorrror. :ns:cnt r0llowing from thr opinion xv- Eorersr, rxoepta :,uest of !iovaobar 14, 1939, upon rhloh tha aborr opinion nea ;I?& reveal ,tha rollant~ raotual alturtion thwaln:

Tar your intornatlon end ettantlon w submlt ?ohsdulr of ths tam8 and pensltlar dur by this oorromtion ror the 24 year parlod, an roll&s:

?rsnohfer fezas, 24 years at 90.00 par year 3 24G.00 10% penalty for late report (Art. 7069) 24.00 25:; pczalty for letr payseat (Art. 7C91) 60.1 xbtctal .: 33, I $wciyal 'fee (Art-. 7C92) 1.: Vou nil1 note tha revival ira la r&urrd on a basis of 24 yeara and amount8 to a clubetantlal suln of 201my compared with thr s.munt of tsxsrr sild prcaltler, ,,a arm la doubt a8 to mhhrthar we crhould oollrot due. fee tor the period 6 inontho, or thr thla &?lral antire period Of ~Winqki6n0y. - - ww

The only conoluslon -ehlch oan be reochrd fro3 t&is ra- qua.& and tk..e opinion rondsrsd tCsrron 1s that St tile titi of We i’e~uSst, 1939, It WIS the cor.struotlon by ti:e tken Ssorrtary or Stata acd the um~e thereunder that *the additional m.unt Of five vgr cent or suoh tax aeoh month, or freotloual purt or 3 :zntn, a.k.ich shall olarsa arter such rorfalzurr~ (Art. Y .t..: ;325) ~8 t.3 30 baaed on not only the tranohlsa tax delfn- ;;;ant :rr t:.a yam in WAoh th forfeiture OS the rl&ht do busi:less occurred, but also on seoi~ unpaid franchioa tax ~coruing thoraortar, whia:i 1~ y :~ ur ;raaaat prrtc:;lcr us stated In your Ia- ;;u:3st, sul~x*?,

Tionorabl8 Sidney Zethrm, page 6 is established law ln Texas that departmental It

oonstruotlon or lntarpratatlon will be rasorted only where the statute ir rmblguow. See XoCalkm 1. Aea. Ret. Credit "on of .?uetln, 41 5. il. (2) 46 (Corn. App.), in whloh I.&. ln part es r0iiow0:

Juetloe Srltz wrote “The Court oi Civil Appeals a180 holda that the statute article 7094, should be given the oon- strucfion that It exempts the Aesoolatlon from the tax because te) the adralnlstratlre orriotir or the state, the searetery of state, charged with the duty oolleotlhg the tax, has 80 oonetrued Rtatute ror several years, and, (b) beoause the aeore- " tary of state has several year8 so oohatrued an

opinion or the Attorney OanWal. This holdlng la error. "The rule that a departmental ruling adhered to

- through years or admlnletsrlng of a statute will be given Weight, ohly applies to statutes of doubtful - construotlon. Suoh a rule has no,apPlleation to a

statute, euoh as this, that 58 not of doubtful oon- Ramsey 0. Tod. 95 Tex. struction or applloatlon.

614, see body of opinion page 626, 69 S. 'il. 133, 136, 93 Am. St. Rep. 875."

T&t Artlolae 7091 to 7092, VACS 1925, are in pert' aiabi&oue IS demonstrated in that they have been judlolally oon- strued by the Supreme Court of Texas in three outstanding asses es tollo-iis: .Federel Crude 011 Co. 0. Yount-Lee 011 Co., 122 Tex. 21 , 32 S. 'Jr (2) 56; ROSS AxQI~o~ 011 CO., T. State, 134 TAX. 626, 1% S. ‘:. (2) 798, end Federal Crude 011 Coi, v. State, 169 S. X. PA6283 (err. rd.1 cert. denied, 64 S. Ct. 66, 320 vs. 758, 88

Fowwer, in none of these oases did the Suprenm Court Pess'on the question here presented.

10 view 0f rsot that prior to the year 1339, it *es the departmental construction of Article 7092 by the L%C- retery or State’s orrlce to compute the five per cent (52 1 additional amount on all delinquent rranohlse taxes as they

aacrued until the final revival by the peyment of all delinquent fraaohise take6 and panaltiea, and that ittornep Goneral* O$inlon No. 042, aupra, baaed upon such departmenta oonstruotion approved suoh oustom.and usage'aa @ matter of legal oonetraotlon of euah Artlole, it is the opinion of this department that Attorney Gen- orsl's Cpinion No. O-72, dated November 22, 1939, fully mswers your query and the anmier is therefore mxi.*

Very truly youra ATTOR!QSY OX3X!lAL OF TXL&S BY

C. IL Rloharde Assistant CKR:zd