Untitled Texas Attorney General Opinion ( 1948 )

December 14, 1948
Hon. M. B. Morgan Opinion No. V-735
Commissioner
Bureau of Labor Statistics Re: May municipalities levy an
Austin, Texas occupation tax upon licens-
ed employment agencies
that send employees out of
Dear Mr. Morgan: State and related question.
Your opinion request reads, in part, as follows:
“Section 6 of H. B. 264, Regular Session, 48th
Legislature, provides for an occupation tax on
agencies sending employees out of the State, and
further provides the method whereby said occupa-
tion tax is to be paid. Under the provisions of this
Section a county occupation tax is levied upon a
population basis according to the preceding Fed-
eral Census. Nothing is mentioned in said Sec-
tion with reference to the levying or collection of
an occupation tax by municipalities.
“Therefore, I would appreciate your advice and
opinion as to whether or not municipalities would
be acting within their authority in levying an occu-
pation tax upon licensed employment agencies op-
erating within their jurisdictions, and if so, upon
what basis would such an occupation tax be com-
puted.
“2. If you have answered the first part of
question 1 in the affirmative, then please advise
me whether or not an ordinance worded as follows
would be valid:
“‘There shall be levied and assessed against
and collected from every person, firm, corpora-
tion and association of persons in the City of Aus-
tin which is taxed by the occupation. tax laws of
the State of Texas, an occupation tax equal in
each instance to one-half (2) of the occupation
tax levied by the State of Texas on each occupation
or separate establishment.‘“’
HOA. M. B. Morgan, Page 2 (v-735)
Section 1 of Article VIII of the Texas Constitution pro-
vides:
Y
. . . The Legislature may impose . . . occupa-
tion taxes, both upon natural persons and upon cor-
porations, other than municipal, doing any business
in this State . . . the occupation tax levied by any
county, city or town for any year on persons or cor-
porations pursuing any profession or business, shall
not exceed one half of the tax levied by the State for
the same period on such profession or business.”
Article 1146, Section 1, V.C.S., provides:
“The board of aldermen shall have power to
levy and collect an occupation tax of not more than
one-half of the amount levied by the State.”
Section 6, H. B. No. 264, Ch. 67, page 86, 48th Legis-
lature, provides:
“Occupation Tax on Agencies Sending Employees
Out of State. In addition to the license fee and bond
required in Section 3 of this Act, every employment
or labor agent hiring, enticing, or soliciting co-on
or agricultural workers in this State to be employed
beyond the limits of this State, shall pay an annual
State tax of Six Hundred Dollars ($600) and in each
county where said employment or labor agent oper-
ates, an annual tax on a population basis according
to the preceding Federal census as follows: In coun-
ties under one hundred thousand (100,000) population
the sum of One Hundred Dollars ($100); in counties
having a population from one hundred thousand (lOO,-
000) to two hundred thousand (200,000) inclusive, the
sum of Two Hundred Dollars ($200); and in counties
over two hundred thousand (200,000) population the
sum of Three Hundred Dollars ($300). This tax
shall be paid to the Commissioner at the time such
employment or labor agency license or licenses are
issued and shall be forwarded by him to the proper
tax collection agencies. Such tax shall be good for
the same period of time as the employment agency
license.”
House Bill No. 264 provides in Section 3 that each li-
cense issued by the Commissioner shall be good for a period of
one year from the date of issuance.
Hon. M. B. Morgan, Page 3 (V-735)
If this annual State tax of Six Hundred Dollars is an oc-
cupation tax, then under the above-cited constitutional and statu-
tory provisions, municipalities have the authority to levy an oc-
cupation tax against such agencies in any amount not exceeding
Three Hundred Dollars annually. In our opinion this State tax is
clearly an occupation tax. The Legislature so denominated it.
Such agencies at the time of the payment of this State tax are
required to pay One Hundred Fifty Dollars ($150) as a fee to se-
cure a license that is good for a period of one’year. This fee is
charged for purposes of administration of the law and to regu-
late such business. This State tax is levied clearly for revenue
purposes and placed in the General Fund. The Court in Shed v.
State, 155 S.W. 524, approved the lower court in defining the word
“occupation? as follows: “By occupation ~ . . is meant a calling,
trade, or vocation which one engages in for the purpose of prof-
it, or making a living, or obtaining wealth.” This tax is levied
and paid for the privilege of engaging in the named occupation.
The Court of Criminal Appeals held in Benson v. State,
44 S.W. 163 that an order of the Commissioners’ Court levying
an occupation tax on the occupations taxable by statute was suf-
ficient, without specifying each and every occupation on which a
tax is levied.
It is therefore our opinion that the ordinance of the city
of Austin which you quote is a valid enactment.
SUMMARY
A municipality has the authority to levy an oc-
cupation tax against employment and labor agents
who hire, entice, or solicit common or agricultural
workers in such municipality to be employed beyond
the limits of this State, in any amount not to exceed
one-half of the tax levied by the State. Sec. 1, Art.
VIII, Texas Constitution; Art. 1146, V.C.S.
An ordinance of a municipality reading as fol-
lows:
“There shall be levied and assessed against
and collected from every person, firm, corpora-
tion and association of persons in the City of AUS-
tin which is taxed by the occupation tax laws of the
State of Texas, an occupation tax equal in each in-
stance to one-half (i) of the occupation tax levied
Hon. M. B. Morgan, Page 4 (V-735)
by the State of Texas on each occupation or separate
establishment,”
is valid. Benson v. State, 44 S.W. 163.
Yours very truly
ATTORNEYGENERALOFTEXAS
W. V. Geppert
Assistant
WVG/JCP
APPROVED:
ASSISTANT