Untitled Texas Attorney General Opinion ( 1947 )

_ - R-379 May 8, 1947 Han, C, E, Patterson Opinion No. V-193 County Attorney Brewster County Re: Taxation of wool in gov- Alpine, Texas ernment warehouses on consignmentfrom rancharc, Dear Mr. Patterson: You present for the opinion of this Depart- ment in your letter of April 15 1947, the question of whether or not wool in Federal bovernmentWarehouses ao of January 1st is oubject to ad valorem taxes for that year; and, if 80, upon whom the duty rests to render and pay the taxes, i.e., whether the rancher who pro- duced and consigned the wool to the warehouse or the warehouseman. -ðer the wool under.the circumstanceacov- ered by your letter is the property of the producer, the rancher, or the governmentwarehouse involve8 an issue of fact which is beyond our province to pass upon and which we will not attsrpt tomresolve. We will ao- sume, however for the purpose of this opinion, that the wool remains the property of the producer until it is appraised and in fact sold at a price mutually a- gread,upon betweenthe producer and the Federal Govern- ment. Based upon this assumption,we are'of the o- pinion that until such oale is consummatedthe wool re- mains in the hands of the producer and is a farm product specificallyexempt frem taxation by virtue of Article VIII, Section 19, of the State Constitutionadopted in 1879, which reads as follow&: '?Farmproducts in the hands of the pro- ducer, and family supplies for home and farm use, are exempt from all taxation until other- wise directed by a two-thirds vote of all the members elect to both houses of the Legislature. (Set, 19, Art, 8, adopted election first Tueo- ' day in September, 1879; proclamationOctcber 14, 1879eIW Hon, CO E, Patterson - Page 2, v-193 We think that wool does constitutea "farm productt',and its storage in a governmentwarehouse pending ultimate sale does not preclude its being "in the hands of the producereD Literally farming means the tillage or cul- tivation of the soli. But.,as said by the court in the -e,o;p;r;tJw`` & jJq$$ f$yy~ @fag;" l%ike many words 'compoundldof differ&< &.ements it has the meaning of its own broader than that of thi elements considered separately;for from time immemorial it has been regarded as synonymoucwith husbandry and the soil and the in the crops and earliest7ZFeZ7 We continue to quote from this case as fol- lows: "But, where the milk sold is produced by cattle kept on the farm as a part of its operation,the busi- neas of produc and selling it lo necessarilyan ag- riou1tura.l. pursu 9 t, for the production of milk from cattle which consuma,the cropo grown on the farm ie as duction and sale of wool is producingan agricultural or farm product. Ao long es such wool remains unsold by the ranchman it is a farm product in h a hando'and as such is specificallyexemnt under the.4-oregoing pro- vision of thi)Constitution.- The Legislaturehas never by two-thirds vote of all members of both Housea imposed a tax upon farm products "in the hands of the producerno This constitutionalexemption from taxation would not apply,to wool that has passed out of the hando Hon. C. E. Patterson, Page 3, V-193 of the producer by sale or otherwise, for it is exempt only "in the hands of the producer". If in fact the wool has passed out of the hands of the producer by sale to the Federal Government,then it would not be taxable unles~sCongress has specificallypermitted the State to tax it. The State has no authority to tax property owned by the Federal Government so long as it insists upon its immunity. If we assume that there has been a completed sale and thewool has in fact become the property of the Federal Government and as such continued in storage in the Federally owned warehouses?we know of no Congress- ional action waiving the immunity of the Federal Govern- ment from State taxation under such circumstances. ..s ( .. If, however, a sale of the wool has been made ,. to a purchaser not itcelf entitledt o claim immunity from taxation a different rule would apply and tax liability would begin as in the case of any other per- sonal property, for it would no longer beninthe hands of the producer" as provided,byArticle VIII, Section 19 of the Constitution. SUMMARY Wool stored in Federal Governmentware- houses by ranchmen, but not actually sold, is specificallyexempt from ad valorem taxes by virtue of Article VIII Section 19 of the Con- stitution of this State, as a farm product in the hands of the producer, If it actually has been sold to the Federal Government, it is not subject to ad valorem taxes by this State, in ;;e absence of Congressionalaction permitting . Yours very truly," ATTORNEY GENERAL OF TEXAS .:. ATTORNEY GENERAL Assistant LPL:lh:jm