Case Information
*1 OFFICE OF THE ATTORNEY GENERAL _ OF TEXAS gonorab1.e Gee. EL shepperd
coag3t2olltir of Publio looounts
m&R, Taxan
pIIsr sir:
at&of’ B des%h. The trullt , amaw Ln Tami, rttaokti an6 atocico 8ria bond8 kr eorpor#iiona E than Tmum, Unitad tstatqr Umvmrxaenf ‘bonds, nrunioQal bwiA# OS olti.8 ouQ- ountr) bonda, an& a debt 6&e the s~tak utsida OS I’(IZ(LIJ. Thi rwt:r2cster or xoept acme of the Twarr reouritier) wwa ofmseloa of R bmk in wt Pork ror oonuetl- wh.3~ th8 bhet0nOe tax rOp0rt rap the chde8 a.
Jonss estate was filed ths stocka wad bon&? of eor- recently, poratlons organl%e& in mteter other thm To%&4 United t3tatss Uovermwnt BoMs, Fw3em1~ Land Bmlc bonda, a&oipal bon& of cities outside of Texas, forsign oountry bar&a, on6 thhe debt due the estate by 6. dubtar reaidfui; outetao of Texmi wafo OrPitted fran the ~rpert.
555 i.
gomrable Qco. K. Sheppsrd - Pa&o 2 haa taken the riolr that Chsrlm Hf. Your dqmrtunt
Jonas* rntlrb 5 par cent intcirat ia the Korgsn Jone~ satats is subj4ot to in.&wrItanoe tax, rqywdless of tha QomIoIle OS tbtl corporation whlah Issued tba bonds and stooks, and co- gsr6lers or tko physIoa1 Aoobtion of tha certllIoatsa or other svidanous of ownership, UUQ you roqueet our 0&85on whsther t&l8 poeition 1~ sorrtli9t. la witi portlmnl portion or Art1010
The rd.mhg 7117, v. a* c. 3.8
*all projmrty within th* jurIs6Iutioa or thin st8to. real or personal. oocpornts of incorporats, and any intsrrat thuxoln, . . . . whetbar balonIckrg ?a lRhRbltRnts Of thi8 f.itat* or Eo rsonr who axe not inbsbitanto ra&ardlasL Of whe tr @r such proper is l0o*ted ni do or without thIr state, whIoh ash 3 ~88 abrolutsly or in tru&t by will or by the lam of do8oant or dlotributlon . . . l &m&l, upfm pa+ ofnc; or ror the wo of any por80u, corpoxatlon, or ar8ooIattoa, ba mbjeot to I tax. . . . u
The question of Jur5sbiotioR to tax pa%&rty, both anil intnn&blo, h8r been tha aubJa@t of #uoh &tm- tangible ous8iw by tho oouxts, md irm t5aa to tba tic prdros 00 wh%oh auoh Jurladlotiim mya baa.8 hate been ohmgod. WmUy, la ourxy 1. MoCanlos8 (1939) 307 Lr. s* 357, 63 L. Bd. 1339, 59 3. Ot. 900, A. L. il. i62, jurisdlotlon to tax lanfl, tenglbla parumlty and lntaneibls rsonalty was pleoed rpuerely on ths prataation or banaf t throry of taxation es r oorrelated with the oontrol of the laws of the psrtioular statu ovur th0 thine ox prr8on taxed.
In Curry T. &ooCrnlom, dooedunt, a rosidant of Ton- nwmm,. tranrrerred oartain stoek8 anC bonde to ‘an Alabama trust oorporation by truet Sndeatun, rssclrving inoarrul for Use, tnu powrrr to rimovo the tru#Eae and substltuts sn- Other, power to dirooc sale and investment of tha trwt
ropwty, crnd the powsr to dispose Of the truet Bststs by hmr P ast will. anC tcrstamant. tint51 d%%%dmt’% death the srldencnr Or the intmeiblwa wwre losetafi 51i iU.sbsnui sod thti oar- tn that stat%. nt her death, poratfw edmb5aterud tkio trust dsoctdent urrrrclaisd the reevrved power +smt&wntorg dispo~+ kad bequenthed the LnrPt &TQ&W?tY thu Sami trustsct, tiOA, *3 J but ohangQ(L W&i original trust indmtura a8 to awunte end eatutaa. Deodsnt S'urther aypolntcra T~a~888Qa and Alabaa@ trust c~mpanioa &cutorU as to the propaftioa whioh ahe might own anb havetbe Cuapoao of by will atate&. The exQw- right k ths rtrrpwatlva suit i&the ohanaery eowt of Tenneaau agalnati the tore brou&t to% oftiolal8 or Rlabama tad Te.mes8ee Draglng for a Qaalaretorg the artate taxabl+ by the ju~nt the portl(3ae to 4eteiaUs napaotfvo atat88.
m0 8th WU.Xk th88RUa that the dU8 p~008~ 0~8U88, au t40wbrutta by pcerloua 0asea in the aupw* Court (rarmr8 tazlng thu trumfer and that ON or t&e ethw ha& to be aaloatd sr tha l ltua of.th8 intan&blra. Tha &%pruae Court, tn u1 oplnlon by 36#u held Ohat botkA1abppI and Tonnaasor had ~urlaaioblQn, bg PUB pxQcrrr, to l8pQre a cloa6h 68x utlL5wl OR traRarar or 6h4 tnt4la&1b198. airtrbi001Qn 60 68x W&8 *@aa M p;poteotiM or budit theory. Hawmrar, tan(blblo an4 in- tanglbla uery 4iotlngulahad 0.0 the gxound that in porsaralty the oeae or the forrscrr oontrol oopld b8 8xwtad 0181: am3 pro- uhm.8 * the oaae 0r to otiQn l isorQra to the pbpaleal alJag, latter aourt aaid (307 U. 6. at 369)~: “Vw?g U!ferbnL both th~oretloal couddoratlona,
.a& praotlomi, app4 to tblv tautlon or lntas&blerr, &a, rights whloh are not rrlabo4 to phyalraf thinji. Swh rlghtr UF* but relatlctaaU~a batwean pa~~ona, na6ural or uo+arat%, u&&oh 1mu ,raooq- nine8 attaohix~g to t&a,nr oortala maotiono canfotea- l b& in owrta. Tha gowar of ~ovammant Qvlr thea and rho proteotfon whioh lt slvaa thoa ouaad~~, bo rxartml throw oQxitro1 of a phyalwl thing. They ma ba made effrotivc only thxoggh oontrol QVW and affor4od to thoaa pereoaa whoa% relation- pxot@otlon f&i&t@ are tha origin t&m ri@ha . . . .
* . l . . the teatstrir, *&ire, fo r resaona of h er awn en l ~joy&g bhe althou@ &mleLleB ia Tonnsaaer a benerita Qt it8 1~8~8, found it 84vantegcow to orsat of lutanglblua Ln ldd+ama by veaLlag legal a *4 01th to the $ra$a&dblea end limiteb pOwern Ot oon- trol over them In ~lsbsnra. But she alw provi&trd t&it by resort her powar ‘to dl~rpoau @f proprilrty conferred ;?DOU hur the li:w of tha &ml.- by nlll, atle, tii~ truss% cou.l.8 br;bem.inated mih the proptrrty pit88 uafir tka will. she thus oreated Lwo cuts lag81 rolatloP&hlpa reaultiry; tii dlatlnat. lnteqlble
.i&hto, QDB oabodiad in tha lee1 ornwrrhip by Alabama trustee of the intangfblrs, the other omboalbd iA the opuitabla right Of tha abObd8nt ta notion the truatee alth rriepeot to oontrol property and to oompd it to pay over to the her iirc, and in her power her the irlooes aura to Qlspoao of property at Qoath.
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“&he naoss*erlLy invoked the crld or the law Or' both atates, ani¶ hor logateoe, thay 0~1 aoIour8 before thb benefit8 Of 8UOOb88iQR~ 0Wt bVOk6 ths Ona @55Qy law Of bat&."
It la evldant that the L.cgal ownership of t&e AI.80 Jurtlry th8 impQrition of,a bai!ka truakt, we0 baffiolant train that atata.~ ~bven under the old ,idra Qf loealielng it met be oonosd~Q, an did Butlar ixsta~&bl#lr, in hi8 din&ant, Alabaa ha& thr $irisdiotlon to tar on the bsaia of *buaineaa aitua.w in Qravbs vc islllott,
A si.mlhar rituatlok *au prsafmta~ 307 u. 6. 383, 83 L. &CL 1356, $9 ii. ct. 913, and the Jiirlsdio- tiM Of the St6k *rhiQh W&8 talc slitUe Of thtt tl%Qt, tO,taZ wan beyond gwatl~n. 50 ala0 la rr dam of prfaprty taxi 3928 Dttpoalc an& Tru8t Co. VI Ylrc;.icls, 280 LT. S. 83, 74 L+ &I. 76, Taxen Law Acavkw
Y. ct. 59, 67 X. 3.. it. 386, &a al8.0: $6.
The QsOtWtion, btnofit alid OORtTOl theory Of taXa- tlou of htwglblea was reafrirawd by tiha Lupraew Court in &t&o TQX Coliwisaion of Utah v. ~xldrlch, 316 U. j. 174, $6 l..
id. 1358, 62 3. dt. 1008.
$0 here, Chrrrlae 11. Jowe* in thy Wrgan lntc;rest Jwirro truet is taxab1s under aithar theory. Thhe truut 0~s its exiatanocr law3 of t&r: stat6 T6x6a law to th-i 0P T~omm.
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