Texas Attorney General Opinion: V-1037 Page: 1 of 5
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April 7, 1950
Hon. John Ben Shepperd
Secretary of State
Austin, Texas
Attention: lion. Louis Scott Wilkerson
Assistant Secretary
Opinion No, V -1037.
Re: The inclusion of intangible
drilling costs in an oil corn-
panry's assets to determine
its surplus for the purpose
Dear Mr. Shepperd: of franchise taxation.
You request the opinion of this office upon the follow-
ing question:
"Must the full amount of intangible drilling costs
be included in a cor poration's assets for purpose of de-
termining its surplus (which is paR t of the measure of
its franchise tax under Article 7084, VACS)? As used
in this question, 'intangible drilling costs' are, as de-
fined in U. S. Treasury Regulations 103, Sec, 29,23 (m)-
16, 'All expenditures for wages, fuel, repairs, hauling,
supplies, etc, incident to and necessary for the drilling
of wells and the preparation of wells for the production
of oil or gas, . . '"
The two statutory provisions with which we are here
pl imarily concerned are Articles 7084 and 7089, V.C.S.,, the first
dealing with the basis upon which the franchise tax is required to
be paid and the second the report required to be submitted by the
corporation from which the amount of the tax is calculated. These
two statutes provide in part as follows:
Article 7084. "(1) Except as herein provided, ev-
ery domestic and foreign corporation heretofore or here-
after char tcred or authorized to do business in Texas,
oz doing business in Texas, shall, on or before May first
of each year, pay in advance to the Secretary of State a
franchise tax for the year following, based upon that pro-portion of the outstanding capital stock, surplus and un-
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Texas. Attorney-General's Office. Texas Attorney General Opinion: V-1037, text, April 7, 1950; (https://texashistory.unt.edu/ark:/67531/metapth265856/m1/1/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.