Case Information
OFFICE OF THE ATTORNEY GENERAL OF ‘TEXAS
AUSTIN
Hon. M. 0. Plo.omrE
aaoratary of at6t-a
Austin, Tezar
Dear Ylr I Attant lent Mr.
emit whloll subatantle llr rmttcln rrqtiina 4 un4w Artlola 0 reaoraal O? oa to bo olosr4 dbtdJ F--d- 1, an6 fron aoh arfl- l tarntiar an4 ocrlhrt lnnehlr* tsix au. nq 1; i qu6etlonr. rrrotra roaolpt Mavrbar lettar or your you submit tha following qaeatioaa lor an opihion: the 8eoretery of Statr author- cupowsred to cot tin&r Artialr &~EI and require a beginnrr eorporatlon to file an afficiatit, p~hlab would pror&ddr nub- 6tsntiallp xam information n'ulma
be coapllei4 undw Article 7089, 6n amu* % rrcom3s of eueh oorpemtlon to be ale6e4 at8 detr prroeding May 1, mn4 inanramel8- frtm mioh atfida*it datermine and aollrst
th6 ?r6nahir* ti8X duo xes l?
--- .---^..---” -..- .- ^_..C “i-Y-l.l .,D .TsoaI 1-m*.-....
Hon. M. 0. Flower-a, pafle 2 the answer of tha above qusa- (2) If
tlon Is Tua-, should the demand upon tba
corporation requlra tha books to br closed
on R definite data, or upon an lud~flnlto
data to br daterained by thr oorporatlon
from a standpoint of oanrenl*nar end 88
mar to May 1 es poniblr, whloh would the repar t and pay thr
anablo thapi to filr
tama on that date3
(3) Ii tha rooorda are to be closed time, what data should be the at CL fixed time? 0loalng
(L) If it ban km deold.4 that we do have tlxla authority, would this Depart-
sent havr the further authorltl to audit
ell beck irunohiar tax aooounta and ro-
aaaaaa franehlao tams, or would tbr state
ba estopped by this prior drpartaantal
praotlcr?
Artlola 7084, Ravlrd Civil Statutaa, 1925, as amnaod, reads in part as follouar
*Lxorpt am heNin provided, arrry oorporetlon hereta- domuatlo end forrltp rora or heraaftar ohartrrrd or authorized 40 bualnoaa In Toxaa, shall, on or br-
rorr May 1st oi oasoQ par, pay in advance
to the Saemtary of State a rNnQhl88
tax for the yaar following, bared upon
that proportion outatandlng oapitel
stook, . . .” Article Revised Civil Statutoa,
provldoa In part:
Whenaver a private dolpsatia clorpora- tlon la chartrmd 5.n this Stat., . . . such
corporetlon shall ba repulsed to pay in
advanor to the Seoretary of Btato, as Its tax rrcin that tlaw doom to
tranch~ae
inol~dlllg the thlrti(lth of April next
iollowln~, only such prOpottlOnata pnrt
Eon, M. 0. Wmara, pafw 3
Of its ?ranUhIaa as trrainabova 6~~1 tax, aa the period OS tim baswaan pnaorlbad, the aat0 of ?lling of its artIcl88 of in-
oorporatlon or tha lssuanoo OS its grrmlt
to do bualneos, as the aese oay be, and
on the firat of Alay ?ollouin&, boars
to a aalrndsr par.”
Artiols 7087, Rsylaad Civil Statutes, 1925, ma48 08 Tollowar tb amount or flrat
“To dcGomine franohhiae tax pamnt raquirad thla b ohaptrr any dcuaati~ aorporat I 011 whloh
MJ ba braetter ohartered, or OS any SOT-
a&n oorporstlon whleb my hsraaitar apply
ror a perrrlt to do buatlnaaa within thla end also to drkrdae tb aorrrst-
Stab, maa 0r any rrport *hIoh 18 provided Sor
In this ohaptrr, tha Edoratary of Btata
mar, whwvrr he daraa It neao8aary or o?
pro-r to protab3t th8 intweet*
St&+, any on0 or Q0rs of the of- rrqulrr floors or such oorgoratlona to mLJ aPd in the o??loa or the Saontazy
fllr an ~r?ld~ylt setting Sorth Sully thr
State rocto oonowninc, the mount of ths aurplua
am3 utilirldrd prallts, roapaotlval~, l?
any, OS such dolvatla foraign aorpora-
tloon; and until tha Gaoratary of State ahall
bo rull~ astia?lrd ae to thr amount OS aaah
aurplua end undlvldrd protlta, rag ootlvelr,
l? any, he shall ntt Slle thr artlolaa of
lnoorporatlon OS auoh pmpoaad 4omaatlo oorpratlon, or issue such peralt, or aa-
aapt such Sranohlae tax.*
Art1610 7089, Reviaad 01~11 Eltatutee, reeds as rollowar
i
Hon. U. 0. Flowms, peer 4
wEccept as hsrrir, ~mvldad, a11 cor- 2oratlms now required to pay an annual
frenchles tax shall. between January lot
erd i&ml; 15th of aaah yoer, m&e a aworn
roport to the 8aomtary of 8tata. on
blnnka fumlrhod by that officer, mowing
the oondltlon of suoh corporation on th
lart ita preoading flcloal year. . .I
(Tha atatuto here mkrs tsrlous provl111onn
QGnaOruiug tha oxrtant8 8nd fill&3 Of fhr
report, ana other mtterr.)
Artlalr ?W?9a, F%~vlmd Civil 6tatute8, 5th Called 68rslon, p&go Aots 1930, 4lat La&lslaturr, 220, Chapter 66, R~otlon 4, read8 aa followat
'The f'orprs prrrarlbad shall eoataln other information a8 the Baoratary Stat0
may drain adtlrabls end ha ma,r adopt rulem and ragul9tlons prorldi~ anrome- for of the pmvlslo~ hrroof sod may ro-
mnt qulrs cor~orstlona to mum auoh moor66
MI say be naorrssry In dotrrinlnlng tha
aaonnt cf taxaa that may k dua herrundsr.
No tar shell be paid Wloh my not be col-
;;;IM;~ andar tha Stats atId Fadwe Conotl-
.” Your lettrr dlsoum~ the eboro quaetlona end atcatuks contlrmek as lollowt
‘For t&r purposes of thti opInlon oonslder a corporation formed between
January 1 and May 1. Artldrm 7086 and
‘Jo137 presarlba the proowkm to b8 Ml-
10~~~3 in asorrtainlng the correot aaount due rrtxu data ot inoorgoration
nay 1. Article 7089 raqulrrr all ompor+
tlons file betwarn Jen~r~ 1 and bieroh or wioh year (whioh tlms my ba ertrod*d
to %ay 1) Q rranohlse tmx report showin% the candltlcn or suah oorpomtion on the l~Jt yeer. Cbviaun- day or lta praosding flecal
ly tl corporation fx:aorpomted during th*
tima under oonsldsretlon has not had suf-
ficient tirns prior to Malay 1 to oo@5t* a Artlc.l.8 7087, on tha othar
risoal year.
550 Bon. M. 0. Fl08ar8, pa&a tie pmeadura
hand, maraly prasorlb88
ba fOllowa data bf lnoorporatlcm in d8tarmlning tha tax rrom
down so May 1, maker no mantlon ai tie method to ba fol-
lowad in aaeartaln* the tax due on May 1.
Art1018 7089a ~rorldaa that the horatr~y say edapt rule8 ma ragulatlon8
or Stata
prorl4lng for the anl’erorm8nt of the pro- oi Art1018 7089, and amy raqulr8
vision8
oorporatlona to 0~88 ~ruoh record8 81 m8y the amount or
b8 naoa88ary la data~lnleg taxer that nay be dur under Artlola 7084. ‘?A8 8n illurtr8tfon of tin problem OOUiZW&ing thil 0ffiOa ~8 sita ~!88a Oi February
a oorpor8tlon lnoorpor8trd with a oapltal of $209 000.00, who88 trxeblr
oapital ~88 lnoraaaa4 ~~3.,000.00 two~daJr8
th8raaftar. oorporetlon8 8rc4 Traqusatl~, araatad for the purpoos o? borrowlag sonar
to prwen$ lndlvlduetl liablliQy. 0n the oth8r luoraara hrnd, tha eorporatlon sight (T de-
oraaaa I t8 aapltsl l took, or be eonrayed a
t-8 uD0m 0r 88m8 *iah would ozuati
a larea rurplus bat-an the data o? lneorpora-
tlon and the followfail May 1. praotloa bi
"It ha8 bean a oonattant thia otrloa for the Charter Mvision to a@-
oartmin tba amount tar &a at tha time lnaorpontlon, and also 8Urin the asrpon-
tlon of tha mount of tax &a on H8r 1 follow- lng the data of inoorporatlon, barrd upon
the taxable 011plb1 dlsolosrd by the @hertar. la @ia ouatomary and moat
"While th5a xpsdiantmcsthod ofhandllaQ the a8tt8r,th any 8Qatutory rwthor- writer umbla to rm oomputation thr franshin ior lzation due on May 1, in this (Banner, n&W 18 thare any spaolflo 8tatnterp authotizatlon for
acmpll~tlon or this tar by 81~ othar mam8,
other then tha ponafbla iapliQatiOn Of Artlola
7069a. *
Hon. Y. 0. Flusara, page 6
The AttotmJ Oanarti ‘8 opinion to whlnh you addra8aad to Hoa. W. W. Eaath, tlatad Oetobrr 18, refer, 1934, nrkar Sollouing rulkpgo: * it th8 O@liOE tbr WrikX Of
that 8ia'a&81 X8pOl-t to ba SIM4 b tW8m
Jaauarf lrt and Maroh l$$h should rbaw tb
oonditim of a oorporstiem oa tbr hat day 1 ta pnardiag yasf prior So $Sn- flMa1
wary 1st. . . . I) It 18 Oh8 altar 0pin10n
that b;S&; a ~omortio eorpvmtloa fr rrq~irrd to Slla what ~001p term a rawlar 8ufSar gaaaltla8 tha:aree for railmu report rile said report, itaut have brd a vomplatr sir081 ear priar to the tima la ahlob It Ir :' raquka 3; to f&la its annul rcrprt. ti otbr
*ordO, it EUUt h8~8 hf4d 8 ~O!@pl@tS ?bOdl year prior to fabuary 100..
". . . X will statr Ub if a dOluSti0 corporation has had a @oil ate f%a81~ yam? prior to JaaMxy lst, it SOQU$T86 s&l*
it8 8nntl81 rrporo b.twraa~Yalmar~ let an4
X8rohlJth,andtbr fraaohla8 tarIP8tai ba baro&kp.
neo888ity 8&a NpOd. on th8 othar hand, ii the"-tror#Wat~on I8 not liabla
r0r the ririira of an annrul report, rlnor
it hnd 11~ ii8Oa~ Ptr,, tbm tOP SUPt OOIP-
pat8 the t132 sxos the n~ooxar Ln pur 0rf-m .' relating to SU8h OQrpVa%irJa, ~888 YOU deem other InSormtIon moa8sary to datarm& the amunt of tax that m)r br OU@. In 8aeh
avant you m8y raqulrr 8n Sfs~uEVit, ex ur ruoh oorporatlonto aura,8aah m-
xaquira cords ar you dora aaoa8aa~ the amount In datermlnlqg t&at rry ba dU8. *
Han. Ii. 0. 7low~rr, pa&.
Tha faot that 8 beglnnrr oorporatlon nr taxable capita1 and.2 ArtIola 7064, b- its lnomasa tveerl the date of IaoorporatIon atioh increasei bakq tarrble under your baparwental ena xaf 1st without prsatlaa a006 aot plea43 it In 6 dlffor8nt porlaio~l from an older oorpomtion whI0h Iaorra8rs It8 oapltal on Ma7 2nd or brtursn its pneoding flroal 0108lng lrlo. o-764. 11x3 Ma7 lat. Opinion
We l &ma with 7our oonolwio~ that the rrtatutem provloIon for tkn proordurr do net mike datlnlta to k miOW8a 133 08O~Tti~~g t&0 MOtUIt Of 08X i%M its 8d~811418 on the bfa7 lot next w0t3*0aiag tbr iaoorpomtIon l k- glnmr aorporetlon. Thi8 $Og;.'i;hd kilt% trtra, th6 lO= WI4 00moIobmt 00LutTu0t10a eul pre0tIor whloh you alao 8teta la thr m8t 8~~6 r@ th# - mat, on’;,& lamgae6gr ot tbr ootut in a* 1, ALtl8l¶tI9 PIN L (Tar. Clr. App., 1939, * reihmd), 134 8 a t2aj 'mo)f WWMfOM booonm 8 bO%Omini~~(& &O&r. J8- BeOiall7 i8 tb18 t?U* ra&?~tdili& rOVOnU.uI *OaOltr@8, bmin~tzation whlob ,&a (Lll&8r eoa8turt ob8an~tioa Of tO0 10&i818ttlSS.w
Youra var7traly ATTORSBY OtlilWRAL 01 TUXA8