Untitled Texas Attorney General Opinion ( 1939 )

OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Honorable Gee. Ii.Sheppard
comptrollerof wbliu Aoeountr
Austin,Torae
Dear S1rr 0plnlon no. O-la
Re: ReduotioA OS
are In rmml
is
0 stat0 or Led-
tlon with the
d La Texas.
806lrb8 your
the taxpayer la
sd would be a'e-
r&r the YenQr'o lion Bate
rt themof ior taxes in T-s.*
EOnorablO Go. B.
hrtiole 7147, Revised Civil Statutes, 1925, reads
as r0110r0:
ii registered in this State, whether at
hams or abroad, and all oapite3.lnvestod
theraln; allmonem at interest. elthar
dthin or without the State, due the per-
son, to be taxed over ,andabove what h
pays interest fbr. and all other debts'
due such person over and aboro hls lXl-
debtedneos;all pubiic stook and eecurlr
tfee; all stock in turn-pikes,railmada,
osnals and other corporations (exoept na-
tlOndl banka) out Or ths State, owned by
inhabitants or thla Stats; all personal
lState Of moneyetd corporations,whothor
the mars thenof re8ide In or out of
this 8tate, snd the Imom or any anup
ity, unless the oapitfikor such annnl$y
be taxed within thir State; all aharea
1x1any bank orgsnlaed or that may be or-
garbed under the laws or theunlted
St&em; all lmprovavnta made by persons
upon lsnde held by them, the title to
which Is still tasted In the State Of
Texas, or ln any railroad company, or
which have been exempted imar taxation
ror the benerit or IMT railroad 'aoapaay,
or any other oorporationtihose.pro$arty
is not nubfeat to the same tie and rule
or taxation as other property.*
It lo provided in Artiols 7149, Rerls.6 Civil
Statutes, 1925, that:
"'Ceddlts.' - me term 'credits,'
wherever useUd:inthis title, shall be
held to mean and lncllodoevery olaim
and demand ror mney or other valuatble
th*, and etev .dutmity or Mimi of
mroriey~
receivableat stated period&
1.27
Honorable Gee. B. Sheppard*Page S
due or to become due,.and all olaime and
dsmenda scoured by deed or mortgage, due
or to beoome dueru
The taxable sltua or the $lS,OOO.OOvendor*8
lien note, in the kbsence of addiflonal rac*i, Is the
domicile or the owner, whether seaured.orunseoured.
Ferris vs. Xemble (S. Ct. l&39) l&
S.W. 689
Connorsvs. City or Waxehaohle (8. ct.
laS9) 19,S.W. SO
Great Southern Lirs Znsura~a co. VB.
alty or Austin (s. ct. 1922)
243 S.W. 770Article 7147 lnaludeswithin the deflnltlonof
p~r6ondL property *all moneys, oredits,bonds and other
ovidmoe of debt owned by cltizsns of this State, whether
the 661~ be in or’out or the State.* Artiole 7149 defin-
lng ?zedlts* gives to such term a broad meaning so as to
include orerg claim and demand iormoney whether sbcumd
or unsecured. No dlstlnat'ion 15 made between aredlts
whether satniredby reel or personal @ropertp or whether
the property seeurlng same 1s looatsd~wlthinthis Stats
or without It,6jurisdlotlon. ,A,claim or demand ior money,
unless otherw$ss provided by statute, woul``e~sarlybe a
*debt due suah person* as set out in ArtfdI.e'?147,al-
thou@ evldenaed by a promieeorynote. As we aonstrue
Artiole 7147,'lta srreot is to tax‘ths "net oredlts*
owned by a person by allowing a deduction of the debts
wed by him from the debts due auoh per60nr The result
of thls la to arrlve at the taxable value or one ltea
0r personal property, i.e., "oredits.* Thla oonstruation
1s supportedby ZIUobservationmade by ;TustloeGaines in
Griffin vs. Heard (S. Ct. 1890).14 S.W. 892, a8 follows:
"The effect of these provisions
1s simply to eubjeot to taxation,‘in
addition to tangible property, all
moneys aotuallybelonging tothetax-
payer, end any sxaees t&at may exist
0r his areaits over hie lndsbtedness.'
The tax in the instant aese la levied against mn
item 0r intangiblepersonal property or whlah the taxpayer
18 the owner whether eecured or uneeaured, end not egelnst
the undarlylng tangible prop&Q by which lt may be meeured.
Whatever the situ5 or the aeourltg, we think i'tls nonethe-
Honorable Gee. H. Sheppard,Page 4
less an indebtednessof the taxpayer and may be dsduotad
in arriving at his taxable oredits.
Nor do we think the faot that there is no oonneo-
tlon between the $lS,OOO.OOand 87,GOO.OO items, and that
they do not arias out of the same transaoti~n pretant a de-
duction. The apparent purpose oi the statute is to arrlre
at the balanos of the total debts due suoh person over and
above @Is total indebtedness.
It Is our opinion. under the iaOt8 stated, that
the taxpayer would be reqdred to reader as his taxable
oredlte the value of the $15,000.00note less the $7.000.00
Item or indebtedness.
Your5 very truly
ATTOHNXYGEMERAL O? TEXfiS
ATTORNEY GENERALOF TEXAS
/