Case Information
*1 GENERAL Hon. Gee. H6,Sheppard
Comptroller of Fublic Accounts
Aw tin, Texas
Dear ~78r. Sheppard8 Opinion No. 04068
Re: Under the faet6 EUhnitted, i6 the agent of an oil company a %otor oarriar" or "contract oar~ier6.liahle for th6.gross r606ipt6 tu provid6d in Article 7OGCb, R.C,S. of TEX~E?
YOU present for the Opinion Of thi6 departmsolt tWo qUOEtiOX,E which appear atthe oonolusioa of your letter, whio~h we quot6 in full a6 fOl1OlI68 Sec. (a) prolridEE~a6 fOll~61'
“Articl6 7066b, :-~*V,&oh individual6 partnership, company, assooiatl6a. or oorporatiofe doing :'bue%&666 a6 a "mator bu6 company" as defined in Chapter'270,~AoLob Boylar Seasion of the Fortieth Legislature, as amended bythe Aot6 of 1922; -Et Called Se66ion of the For+first Legislature, Chapter 78,'or a6 saotor oarrier" or "contract oerriers as defined in Chapter 277, Acts Regular the Forty-seoond Legislature, over and by u6e of the pub110 Session.of ~highways of this State, ,shall make quvterly'on the first day of January, July. and Ootobar of eaoh year, a report to the Comptroller, under April, oath, of the individual, partnership, company, assooiations~or oorporation ,' by its president treasurer; or Eeoretame, sharing th6 gro66, a6Ionnt r6eOiW ed from intrasta e business done within thie Stat6 in the payment of E
charges for transporting persons for oomR6ncration and any freight 6r oo6n modify for hires or from other 6ouroe6 of rwsnu6 fro61 intraEtat.6 reoslv6d busin66s within this Stat6 during the qUart6r next pmo6ding* Said i+irid- ,, ual, partnership, company, assooiation,,or corporation at the' &se Of making said reports, shall pay to the State TmaEUmr an OOOUpatiOn taX for the quarter beginning on said date aqua1 to trro,alid tW-tenth6 (2.2) per oent Of said gross reOeiptS* a s shown w said report. Provided, hw6v6r. carriers of persons or property who ar6 required to pay an intangible assets tsx under the laws of this State, are hereby exempted from the pro- vision6 of this Article of this Aat.*
"III defining Hotor Carrier and Contraot C-Wrier6 Soor la of Art. Sllb &6+X6:
?;On, COO. !I. Sheppard, page 2 (C-6068)
"*Provided, however, that the term "Motor Carrier" and the term "Ccn- traot Ca,riera as defined in t&e preceding section shall notbeheld~ ,'.~' to ineltder su&sec, (.s) of the s- se&ion 6+ &ticls . . . pm&d&~?~T~.‘i ‘.- ::.,A.:?:. 'Where merely incidental to a regular, separate, fixed gnd established business, other tban a transportation business, the transportation of employees, petroleum products, and incidental supplies used or sold in connection with tile wholesale or retail sale of such petroleum products fromthe refiner or place of production or place of storage to the place of storage or place of sale and distribution to the.ulti,mate.nousumers~ in a motor vehicle owned and used exolusivaly by the marketer-or 'refiner,' or ouned in whole or in part and used exolusively by the bonarffde oon- gignee or agent of such single marketer orrefiner, as wellas :.shere merely incidental to~<a reylari~~separate, fired and establiqhed ln16lnes6, other thana ,transportati% lxxtness, the transportation of petroleum, employ?es,,~ mater.ial~:supplies , and equipment for use in the deparbents of lttdq~~~~leupl.~~s~e~~:'hy.~~~:~bons fide consignee or agent as used .i heroin being he2leby,defiaed:Pnd,,construed, for the purpose of this Act, I.’ to mqan~a persc& Underoontr$ct%i.th a single principal to distribute
petroleum products in a limited territory and only for such single prin- -:,;c.- ~1;: ,.~I y .! ,.~.?, : z- ::: ~~:, ;. _, ,_ .,. ,in‘;' cQx$,,:,..~.,,~..~.~ .I.; ~,. .::. . . . . .i::.~, ,- '. c: L .,. - _I. ,., .,*. .,. i :, 61 have a ease in mind where's party is agent of one of the majoniJ:hom- panics and said agent with his own truck hauls petroleum products from the oil ~061~~6 refinery to .hi+wh.olesal:e lbulk st%ation, and th$ oil company pays &he agent for such hauls at the same rate as they would pay some other ___ . -~Eq?ntq$ct siotom.,~a@.qp~;: fin makingthe~ba~sto his',- bulk sxatlon or"
reta$&etation;-&+motor .oarrier.passes through ore contacts t6qo ~ormore ih&pornted t%vne*;~ :.: ; .:.t,~ . ,~~ .; ~'~ :
-~,,,' .~ ..;i. . . . '; slJn& the o,bn&a~t~w&h the oil.'company+.tbe 6gent is responsibl'e:for: the:p~duc:tBfFOrmthe time~~it is 1oaded~:on his truck at the refinery until pold. ..? ,, .: '. I ! : ,.. .' : . . . . '. 7,~, :-: "I .,^~ ~. ..: 'j : :, ,- r,“- T ':_ : .-> "Please te1Lm.e &? the motor carrier>~is liable for,the~gross receipts tax :,. as .pr,rovjded; f&&n &rt.',7;C66b.'
,.;~..aPor ~,ol~r;co~eniezlce~~you-~ill find.attaoh&eopy of. contract form be- ~, .I tween; the ;oi.l ~mpanyand.:srpent~?
L ..!~. :~.;...‘- r _~ ,y,.:,,<. ” ( Supplementing your letter you submit certain da&consisting of
"~&olesale CESSION Agent's Contract," riders to Cosmission Ap@s Con~trgct,~"Consi~eg~.~Agre.ement;,'~and whqrt.1~ designated 48 "Sdnedtie A," and letter attached thereto, in use by oertain oil companies coreringthe.
,
- - Hon. Geo. H. Sheppard, page 3 (O-6068) -.. : I <.~ operations of their distributing agents, all of which are to be considered in oonneotion with this opinion. .'
, hour problem is to determine whether or not the transportation of the petroleum products~under the circumstances <revealed in your opinion request is taxable under Article 7066b, R.C.S.6 whioh.is a part of the Omnibus Tax ~11 passed by the 47th Legislature, .xhich is H.B~;6,,6h.. 184, which was approved on May 1, $941, a@ beoame efr'ective.on.the- samedate. : : :.;; : i,.
This Article;.as it appears.~in V,RiC; Si reads as follows: (Herefollows a verbatum oopy0f: the Artiale:as given on pnge:.one of this Opinion and:fs'omitted~here for.brevity) . _.,~ .:~ '.. ,‘ The above tax act refers to Ch. 277, Acts, Regular Session, 4&d Legislature, Article:9llb, ~V.R.C.Sb, .for the:definition--Of "motor carriers and "contract ~;rrie~":sibject~to~the~:tax~th~l?eby~lmried. We quote said def- inition from the stat&e referred to:: ,":-': ~.: i:. :
_ -:~".. ~.: "The term Qnotor:aarriar'.means any person;, firms 00rporation,.company, oo- partnership, ass6ciatd.on,or joint~stock.assooiatesi~~.andd-their lessees, re- oeivers ort.rustees appointed.by aqy.Courtafiatsower,.Bnning, controlling, managing, operating:er ,cauaing to be operated anymotorpropelled vehicle used in transportitig:properQ~.for compensation:or hcre~.over any publia high- way in this:!~tate; wherd~in:the 0ourseof sudh~-.transportation a highway I& tieen two or more.indorpprated::citi0s, towns .orvillages, is traversed; provided thatthe ters~~~motor oarriert::aa:.ased.fn this Act shall not include and this Act.shall notapply, .L &motor vehicle&:operated:emolusively within the inoorpoisted limits of cities or~towns.?; -~(Enphdsisours) "The term 'contract carrier' mesns anymotoroarrier:as hereinabove defined transporting proparty for compensation or hire'overany highway in this State other than as a consnon carrier."
At the same~session of the.Leg~&burethat passed the Omnibus Tax Bill, of which the tax act here.under consideration is a part, but at a subsequent date, the above.definition'o&a "motor carrier' and soontract carrier" was amended eo as to exclude aertain~~type,s of transportation by .-_ ., ;~ _: f ,i adding the subsedtionsas follows: .'~ ; ( ~':,I. .:.. '~
"Sec+i.on la (1) Provided,.howeTr&, that~'the~teivn~~!Mo~r Carrier' and the term 'Contract Carrier* as defined fin the preceding sect& shall not be held to include:
"(a) Ary persnn'havin;; a re~ular,,sepnrate,~fixed, and established place of buriness, other than a 'transportation ~siness,;whBre,-goods, sares, and merchandise are kept instock and are prir?arily-and regularly bought from the public orsold to~the public ormsnufactured,or',prooessed bw: such person in the ordinary course of the mercantile, manufacturing, or processing busi- ness,ond who, merely incidental to the operation of such business, trans- ports over the highways of this State such goods of which such person is the bona fide owner by means of a motor vehicle of which such person is the *4 Hon. Gee. H. Sheppard,,pge 4 (O-6068)
bona fide owner; nor
"(b) Anv person transporting fum Implements, livestook, livestook feed- stuffs, dairy produots, horticultinal products, floral products, aericul- tural products, timber in its natural state, or wool and m&air of which such person is the bona fide cwner on a vehicle of which he is the bona fide owner to an from the irea of produotion and to and from the market or place of storage thereof; provided, however, if such person (other +hpa a transportation company) has in his possession under a bona fide consign- ment contraotlivesfook~ wool, mohair, milk and cream, fresh fruits and vegetables, or timberinlts natural state under oontraot as an incident to a separate, fixed, and established~business conduoted by him the said possession shall be deemed ownership under this Act.
ere merely incidental~to a regular, separate, fixed, and established other than a trans$ortation business, the transportation of emplcy- L2!is. ees, pet:oleum products; and incidental supplies used or,sold in connection with the wholesale ore retail sale of such petroleum products fromtha refin- cry or place of produotion or.plaoe of storage to the place of storage or place of sale and dietriI.utioq~to-the ultimate consumer, in a motor vehicle owned and used exolusivelyby the,marketer or refiner, or wwned in whole er in prt and used exclusively by the bona fide consignee or agent of such marketer or refiner; as well as where merely incidental to a regular, separate, fixed, and established business, other than a transportation bus- iness, the transportation of petroleum~employess, material, supplies, and equipment for use in.the departments ,of the petroleum business by the bona fide owner thereof in a whiole &which he is the bona fide owner; bona fide consignee or agent as used herein being hereby defined and oonstrued, for the purpose of this Aot, to mean a person under oontraotwith a single principal to distriwte petroleum products in a limited territory and only for such single principal) *
Me must of neaessity, in considering the question presently be- fore us, determine whether or not we should be governed by the definition of "motor carrier" and'"contraot carrier' as it appears in the original Act before it was amended by adding the .two foregoing subsections. The amend- ment as passed finally by the Senate on May 14, 1941, and approved May 16, 1941, becani: ~z'feative ninety days after July 3, 1941, date of adjournment. This amanclm6~~~ WLS, therefore, passed thirteen days after the Omnibus Tax Bill was pass& and approved, and became effective on October 3, 1941, following the effeotive date of the Omnibus Tax Bill on May 1, 1941.
We have concluded that ne must be governed by the definition of "motor carrier" and "contract carrier" contained in the original act speoif- ically referred to in the taxing act. Xe believe the weight of authority, and indeed the holding of the Supreme Court of this State, supports this conclusion. Sutherland on Statutory Construotion, Vol. 2, page 648, is as followsr
Hon. Gee. H. Sheppard, Rage 5 (O-6066)
"A statute of apeoific reference incorporatea..t&~.previsions referred ix. from the statute as of.the~time of adoptionn~~eut,,eubsequent s,mendmer&s, unless the legislature hasexpressly or by strong impltcation shcwn its intention to inoorporqte subsequent amendmentswiththe statute. In the absence of such intention subsequent amendment of;the‘.referred statute will have no effeoten the reference stptuteb-,- #.:.:."*
Chief Juatioe~Curaton in the ~caee of:fcMer v".Carlton (Su- preme Court) 296 S-W. .lOTO, laid dcwn tbe~rule.'aa;feUuwss
>;;y .-,:!:,,.' ,' :I... : ', : "Stat&es uhieh referto oth6r statutes and make $hemapplioable to the sub Sect of legislation are.oalled .*reference stafuteq;t and.are a familiar amd valid mode of legislation" The-general rule is that when a statute is adop ted by a,speoifio descriptive zsPerence,ltihe:,ad?~~oa takes the statute as it exists at that time;.and.,the subsequent.~n~~tr.thereoP would not'be w within the terms of the-adoptingact. " l '" .:,: I .;': >I.~.
.: .., Hnving,thas~~bon~luded,'ne.rprss to the more&f&cult question as to whether or nctdn p9v~c~ent .the LegtdIatuve @&nded.that this tax be dm- posed only -apo*,*motor carriers" and ~~~ontrarrt~asrrie~?~~su~jeot to regula-- tion by the ,Railroad,.C L%m$i ssion under.~e,ie~ti~ns.~rid by Chr 277, Aete of the 42nd LegislatureN in,whioh the erigin&definihionssre feund" Ris Poe constrained to the view that the Legislat~.diP.not.~iotend by this referenoe to make the imposition of the tsx dependent upca whether or not such "motor carrier" and~woontraat.carrier" as therein defrnsd mere subjeat to regulation by the Railread'Cemmiasi'on~ There.is-no,Ie~s.sla~~ve~~~esaion in either a& making the one .dependent upon the other; ~otie-:is.~a-~regn~atory measure" the other a taxing measure. The reference inthe tsxingaotto the regulatory act for a definition oP,"motcr carrier" and "contraat oarrier is the same as if these definitions had-been incorporated in the taxing aot direct instead of by reference. Had this been done, obrriously it oould not be logically argued that sn amendment subsequently passed to the regulatory rot l&iting the preexisting definition of "motor carrier" and "oontraot carrier" would also operate to limit these same terms as defined in the taxing pot" As stated above; the.aots oover different subjeots, one regnlat%e8;:%he~.W&er taxation. They are not in pari materia" We think the real test is whether or not such "motor oarrier" or "contract carrier," p defined in the taxing act,, transports propepty for compensation or hire.over any public highway in this State where the transportation is over a highway between two or more in- corporated cities, towns, or villages"
Liability for,the tax imposed by virtue of Article 7066b, eupra, must first depend upon whether or not the "motor carrier" or "conlraot oar- rier" transports for compensation or hire.. Your first question, read in connection with the preceding statement made in your opinion request, that the agent of one of the major oil companies with his ovntruak hauls petro- leum products from the oil oompaqy~s refinery to his wholesale lmlk station, and the oil company pays %&I agent for such hauls, at the same rate it would pay some other coatraor motor carrier, presupposes that such aa agent is in
Hon. Gee. H. Sheppard, page S(O-6066)
effect transporting for compensation or hire. Such being the oases it is our oonolusiou that the gross reoeipts received by such agent would be subject to the tax imposed by virtue of this article of the statutes. More clearly would such au agent, who hauls petroleum produots from the refinery to other parties, othorn than his om concern, andreceives oompensatiou or hire therefor, is engaged in ~U%SpQr~tiOn as a "oontraot oarrier," and the receipts received by him in such oprations would be subject to the tax im- posed by virtue of this statute. If we are correot in oux asswption that such transportation is oanpensatod for either direotly or indireotly by an adjustment ia the prioe,oP the product so transported from the refinery to the agent's bulk sales station, and where such agent transports for others for aompensation or hire both operations would be subject to the gross rsoeipts tax fixed w th s article of the statutes. 2
In othof words, en agent as designated in your letter, in the language of the foregoing definition of scontraot oarrier" or "motor car- rier," is a "person, firm, or corporation"; suoh agent "owns, oontrols, manages, operates or OWSM to be operated a *motor propelled vehiole used in tramporting property for compensation or biro between twc.er more ~inoorporated cities, towns, or villages," as distinguished from exclusive operation within oit+os or towns. We think such operation falls squarely vithin the purview of the statutory definition, whether treated as a smotor oarriers or sobntraot carrier,! and henoe, as above stated, is sub jeot to thetas imposed by Artiole 7066b, supra.
We think it fair to say, h-er, that the question presented by you is one of first impression, and it has notboen definitely passed upon ly the courts of our State? but whatever doubt exists we feel compelled to resolve itin favor of the tax.
v&y truly yours ATTOBBEII GElWHAL OF TEXAS Py /s/L, P. Lollar L. P; LolIar Assistant APP3Ovi3D SEP 22, 1944 Approved opinion Comaittee /d Grover Sellers ATTORITEY GEiVERAL OF TEXAS