Hon. Robert S. Calvert
Comptroller    of Public          Accounts
Austin,  Texas                                    Opinion     No. V-1027.

                                                   Re:   Classification  of the taxes
                                                         levied by H.B. No. 3, Acts
                                                         51st Leg., 1st C.S., to deter-
                                                          mine which are occupation
                                                           taxes.

Dear    Sir:

               Your     letter    requesting    our opinion    relating    to the above
captioned      matter     reads     as follows:

               “Article  XIV of House Bill Number      Three, Acts
        of the First Galled Session of the Fifty-first     Legisla-
       ture,  provides  in part as follows:

               “‘THE    STATE    HOSPITAL      FUND is created
       hereby.     All revenue   and funds derived    under and by
       virtue of the provisions      of this Act, save and except
       any portion required      by Section 3, Article    7 of the
       Constitution    of the State of Texas to be set apart for
       the benefit of the Public Free Schools,        shall be paid
       into such STATE        HOSPITAL     FUND,onything    in this
       Act or any other law of this State to the contrary          not-
       withstanding.’

             “I shall thank you to set out in detail,  of the
       revenue and funds derived     under  the above named
       Act, that portion required   by Section 3, Article   7
       of the Constitution  of the State of Texas to be set
       apart for the benefit of Public Free Schools.“

               Section     3, Article    VII, Constitution     of Texas,    provides:

              “One-fourth    of the revenue derived   from the
       State occupation   taxes. . . shall be set apart annu-,,
       ally for the benefit of the Public Free Schools;.    . .

           It follows that one-fourth of the revenue collected upon
the taxes levied by H.B. No. 3 that are “occupation   taxes” must
be set apart for the benefit of the Public Free Schools.
Hon. Robert   S. Calvert   - Page   2   (V-1027)




           The following   in our opinion are occupation        taxes:
Oil production,    aas production,    sulphur production,     telephone
gross receipts,    gas, electric    and water company     gross re-
coipts, carbon black production,        cement distributors’,     motor
carrier   gross receipts,    oil tie11 ,servicing, insurance     gross
receipts,   and chain store.

           The following  in our opinion are not occupation
taxes:    Motor vehicle  sales and use, liquor and wine sales,
franchise,   new radio, television   sets, cosmetics and playing
cards sales, stock transfer,     and beer sales.

            Our opinion is based on the following      authorities:
Producers’     Oil Co. v. Steohens.     99 S.W. 157 (Tex. Civ. ADD.
        State v. Humphrey,      159 $g.    2d Id2 (T&.  Civ. App:’
1941);‘mDovis,          Inc. v. State, 142 Tex. 637, 180 S.W.2d
429 (leliver          Iron Mining Co. v. Lord, 262 U.S. 172, 43
9. Ct. 6&6’m2)       Dallas Gas Co. v. 5;tate,261 S.W. 1063
[l)Zl):  State Tai Commission        v. Hughes Drug CO., 293
S.W. 924 [Ky. Civ. Ann.m:             UnitedNbrth   81South Dev.

           o. v. Shannon, 115 S.W. 361 (Ttx. Civ. App.m;
                  tk .CO. v. Sheppard, 219 S.W. Ld 1010 (Tex.
                  . T 1 Ry Portmxi     Cement Co. v. State,
                 jT:CI         Am   IWO)    Texas Consolidated
Tramp.    Co. v. State, 21oV*fJ.W.id 891 ‘(T      Ci    A     194EJ;
C&b v. HarQin+vk,        144 Ttx. 360, 190 Sf.2dv;90p(?$45);
~octtht~~ RtaIty Corp. v. McCallum,        65 F.2d 934 (1933);
W88f8rn Co. v. Slm                          850 (Tex. Civ. App.
                            5 Enainetrinn    Co.. 208 S.W.2d 656
                                         Lee Tiis. Co. v. Love,
                                        urt v. Coowr.      113 S.%‘.Ld
ii9 (Tax. Civ. App. 1938; &t       k. Coo er 13dT A. 433.,
110 S.W.Zd 696 (1937); Sec.37J-uOL, c ht.;         Attorney
f38Urbl’t   @pinions O-4731 and O-4847; Edward Brown &I
Sons v. McColgan.      128 P.2d 186, 53 Cal.App.Zd      504.

                                SUMMARY

           One fourth of the revenue     collected   by virtue
   of H.B. No. 3, Slst Leg., 1st C.S., 1950, from the
   followirq  ttrts,  viz., oil production,     gas production,
   sulphur producLion,     telephone  gross receipts,     gas,
Hon. Robert   S. Calvtrt   - Page    3   (V-1027)



      electric   and water company gross receipts,         carbon
      black production,    cement distributors’,      motor car-
      rier gross receipts,     oil well servicing,    insurance
      gross receipts,    and chain store, must be set apart
      for the benefit of the Public Fret       Schools,   as such
      taxes are occupation     taxes.   Section 3, Article     VII,
      Constitution   of Texas,

                                    Yours   very    truly,

                                       PRICE    DANIEL
                                    Attorney    General




                                    BY

APPROVED:                                      Assistant

Charles   D. Mathews
Executive   Assistant




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