Texas Attorney General Opinion: V-1037 Page: 2 of 5
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Hon. John 1en Shepperd,. Pagte Z (V-i0j7)
divided profits, plus the amount of outstanding bonds,
rotes and debentures . . . as the gross receipts from
its business done in Texas bears to the total gross re-
ceipts of the corporation from its entire business_ which
tax shall be computed on the basis of . . "
Article 7089. "Except as herein provided all cor-
porations required to pay an annual franchise tax shall,
between January first and March fifteenth of each year,
make a sworn report in duplicate to the Secretary of
State, on forms furnished by that officer, showing the
condition of such corporation on the last day of the pre-
ceding fiscal year. The Secretary of State may for good
cause shown by any corporation extend such time to any
date up to May first. Said report shall give the cash
value of all gross assets of the corporation, the amount
of its authorized capital stock, the capital stock actual-
ly subscribed and the amount paid in, the surplus and
undivided profits or deficit, if any, the amount of mort-
gage, bonded and current indebtedness, the amount and
date of payment of the last annual, semi-annual, quar-
terly, or monthly dividend, the assessed value, for State
ad valorem purposes of all. property of the corporation,
real, personal, or mixed, owned by the corporation in
this State and the county in which assessed for such pur-
poses, the amount of all taxes paid, or due and payable
to the State of Texas, or to any county, city or town,
school district, road district, or other taxing subdivi-
sion of Texas, for the preceding tax year, the total gross
receipts of such corporation from all sources and the
gross receipts from its business done in Texas for the
fiscal year preceding:, with a detailed balance sheet and
income and profit and loss statement in such form as
the Secretary of State may prescribe, . "
Thus it is apparent from an examination of the forego-
ing Article 7084 that four items constitute the basis upon which the
tax is computed. They are: (1) outstanding capital stock; (2) sur-
plus; (3) undivided profits; and (4) outstanding bonds, notes, and
debentures, other than those maturing in less than a year from date
of issuance. The total of these factors is modified, however, by the
proportion the gross receipts from business done in Texas bears
to the gross x eceipts of the corporation form its entire business
done in Texas and outside of Texas. The resulting total, after the
application of this proportion, constitutes the basis upon which the
tax owing by the corporation is determined.
The question resolves itself into whether or not "intan-
gible drilling costs" may be considered as outstanding capital stock,2
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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/m1/2/: accessed August 15, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.