Texas Attorney General Opinion: WW-431 Page: 5 of 9
9 p.View a full description of this text.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
Hon. Frank R., Nye, Jr., page 5, Opin'.n No. WW-4i31
Article 7146, Vernr o's Civil Statutes, defines real
property for the purpose of taxation: This is as follows:
"Real property for the purpose of taxation, shall be
construed to include the land itself, whether laid
out in town lots or otherwise, and all buildings,
structures and improvements, or other fixtures of
whatsoever kind thereon, and all.the rights and
privileges belonging or in any wise appertainin
thereto, and allmines, minerals, quarries and
fossils in and under the same."
The pertinent portion of this statute to this problem is
and privileges belonging or in any wise appertaining
,hereto, and. . . minerals. . . in andunder the same." Gas
In place under land is a right and privilege belonging to
the land and constitute minerals. It is therefore real
property subject to taxation under the foregoing definition
of real property for the purpose of taxation. This has be-
come well established as the law of this state in such cases
as Sheffield v. Hogg, 124 Tex. 290 77 S.W.(2d) 1021; Tennant
v. DannT,130 Tex. 285, 110 S.W.(2d 53; and State v. Quintana
Petroleum Co., 134 Tex. 179, 133 S.W.(2d) 112. If there-
fore, "lpiant operator's portion" jf the gas is gas in place
it is taxable to the operator, otherwise not.
In view of the statement that the 1/8 royalty and the
7/8 working interest have been rendered and assessed for
taxation for each year the plant has been in operation which
constitutes the whole 8/8 interest in the gas, any other
taxable interest must of necessity be carved out of the 1/8
royalty or the 7/8 working interest, or both. Otherwise, we
would run into the question of double taxation forbidden by
Article VIII, Section 1 of the Texas Constitution.
Clearly, under Article 7146, V.C.S., the value of the
gas, as realty, for ad valorem tax purposes, is its value
in place, prior to severance. Natural gas in place must and
loes, of necessity, include all its component elements.
Art. 7040b Sec. 2(5) (VC.S.) Carbide Carbon Chemicals
Corp. v. Texas Co., 21 F. (2) 199; Lone Star Gas. Co. v.
T7n.e, f1 S , -W.- 48; Lone Star Gas Co. v. Har-ris, 45 . , (2)
Therefore, if the gas has a value in place it includes
all the constituent elements thereof for ad valorem tax pur-
poses. To put a value on the gas in place and then attempt
to add thereto the value of the separated constituent ele-
ments of said gas after it has been manufactured or separation
process has made it more valuable as personalty, would, within
Upcoming Pages
Here’s what’s next.
Search Inside
This text can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Text.
Texas. Attorney-General's Office. Texas Attorney General Opinion: WW-431, text, May 21, 1958; (https://texashistory.unt.edu/ark:/67531/metapth267043/m1/5/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.