Texas Attorney General Opinion: O-4339 Page: 2 of 4
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Honorable George H. Sheppard, page 2
or trustee, or by any assignment in blank or by any
delivery of any paper or agreement or memorandum
or other evidence of sale or transfer or order for
or agreement to buy, whether intermediate or final,
and whether investing the holder with the beneficial
interest in or legal title to such stock or other
certificate taxable hereunder, or with the posses-
sion or use thereof for any purpose, or to secure the
future payment of money or the future transfer of any
such stock, or certificate, on each hundred dollars
of face value of fraction thereof, three (3) cents,
Construing the Federal Stock Transfer Tax Act, substan-
tially similar textually, (26 U.S.C.A. 1802) the courts have
held that the imposing of a stamp tax on all sales, agreements
to sell, memoranda of sales or deliveries or transfers of legal
title to any shares or certificates, included every transaction
whereby the right to be or become a shareholder of a corporation
or to receive any certificate of any interest in its property was
surrendered by one and vested in another. Niagara Hudson Power
Company vs. Hoey, 34 Fed. Supp. 302, affirmed 117 Fed. (2d) 414,
certiorari denied, 61 Sup. Ct. 95, 313 U.S. 571. Glenn L. Martin
Company vs. United States, 21 Fed. Supp. 562 Raybestos-Manhattan
vs. United States, 56 Sup. Ct. 63, 296 U.S. 0, 80 L. Ed. 44, 102
A.L.R. 111, affirming 10 Fed. Supp. 130. Westbrook-Thompson
Holding Corporation vs. U.S. 18 Fed. Supp. 289.
Article 35 4f) of Regulation 71 of the U.S. Treasury
Department declares the surrender of stock for extinguishment"
to be a transaction not subject to this stock transfer tax law,
which, as we have stated, is substantially identical, regarding
the incidence of the tax, to the Act before us.
Moreover, in the case of Glenn L. Martin Company vs.
United States, supra, the court, in holding a transaction identi-
cal to the instant one to be non-taxable, made the following per-
tinent comment:
"The legal effect of the transaction shown to
have been intended in its inception and finally con-
summated in appropriate legal form was the actual
retirement of the stock. The surrender of the stock
did not transfer to the corporation any title or
ownership therein, either beneficial or only legal,
as it was delivered expressly for cancellation, and
was intended to be retired and extinguished, and not
to be kept alive for any purpose. The legal distinc-
tion important here is that between the surrender and
retirement of issued stock, and the transfer of stock0-4339
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Texas. Attorney-General's Office. Texas Attorney General Opinion: O-4339, text, February 26, 1942; (https://texashistory.unt.edu/ark:/67531/metapth261585/m1/2/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.