Judges: JIM MATTOX, Attorney General of Texas
Filed Date: 3/18/1983
Status: Precedential
Modified Date: 7/6/2016
Honorable Warren New Yoakum County Attorney P. O. Box 359 Plains, Texas 79355
Re: Whether charge imposed on telephone company by city may be passed on to county as a customer of telephone company
Dear Mr. New:
You have been notified by the telephone utility which serves your county that it is imposing an extra charge on the bills of its customers receiving service within the city limits of Plains. The extra charge was initially denominated a `city gross receipts tax,' but was subsequently referred to in later correspondence as a `franchise fee.' This `franchise fee' is equivalent to a charge that the city imposed upon the telephone utility and which the telephone utility seeks to pass through to its customers. You have refused to pay the extra charge and have asked whether such pass-through charge can permissibly be imposed upon the county. You claim that the charge is, in reality, a tax and cannot be levied against the county lest article
This office addressed a similar issue in an earlier opinion and concluded that state agencies may pay a so-called `municipal franchise charge' imposed by the telephone company upon all of its customers, including state agencies. As noted in Attorney General Opinion
Article 1175, section 12, V.T.C.S., requires telephone companies, before using the grounds or streets of a home rule city, to first obtain the consent of the governing authorities and pay prescribed compensation. Article 1181, V.T.C.S., sets forth other conditions which relate to the grant by a home rule city of a `franchise to use or occupy the public streets, avenues, alleys or grounds' of the city. Pursuant to these provisions, home rule cities may grant utility franchises to use the public streets in exchange for compensation measured by a percentage of gross receipts. See City of Tyler v. Television Cable Service, Inc.,
Relying on language in Fleming v. Houston Lighting and Power Company, supra, which characterized such franchise charges collected by utilities as rentals for the use of city streets rather than as taxes, and cases in accord from other jurisdictions, this office concluded that such a franchise charge is not a tax. Attorney General Opinion
Assuming, arguendo, that such charge could fairly be denominated a tax, it is clear that article XI, section 9 has no relevence in this instance. Article XI, section 9 prohibits, inter alia, any political subdivision from imposing ad valorem taxation on the property of any county, city, or town which is devoted exclusively to the use and benefit of the public. No property of the county is even conceivably being taxed in this instance; no county property is involved. See, e.g., Wichita County Water Improvement District No. 2 v. City of Wichita Falls,
We find no statutory or constitutional prohibition against the payment of properly established telephone rates by counties. We conclude that the charge imposed by the telephone utility is not a tax; rather it is a rental imposed for the use of the streets. Were we to conclude, however, that such charge were a tax, we also conclude that such charge does not violate any constitutional or statutory provision which we have found or to which we have been directed.
Very truly yours,
Jim Mattox Attorney General of Texas
Tom Green First Assistant Attorney General
David R. Richards Executive Assistant Attorney General
Prepared by Jim Moellinger Assistant Attorney General
Payne v. Massey , 145 Tex. 237 ( 1946 )
City of Weslaco v. General Telephone Co. of the Southwest , 359 S.W.2d 260 ( 1961 )
Wichita County Water Improvement District No. 2 v. City of ... , 323 S.W.2d 298 ( 1959 )
Southwestern Tel. Tel. v. City of Dallas , 174 S.W. 636 ( 1915 )