Speeches delivered by Pat M. Neff, Governor of Texas, discussing certain phases of contemplated legislation Page: 28 of 61

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meaning of the statute, wholesale dealers are defined as any individual,
company, firm, partnership, or corporation, who buys any of the
hereinbefore mentioned articles and sells the same to be again sold.
Refineries are not as a rule engaged in buying the articles hereinbefore
mentioned. They buy or produce crude petroleum. To an extent they,
or their agencies, buy such articles and upon this portion they pay the
tax. The greater volume of the business is transacted through agencies
of refineries, thereby escaping the tax.
We are producing approximately ten million barrels of oil a month.
We get practically no revenue from it. This stream of gold flowing
out of the State ought as a matter of equity contribute at least five per
cent of its volume to the upbuilding of the State out of whose soil this
wealth comes. Under our present law, the big oil companies that build
expensive filling stations on the street corners throughout the State,
pay little or no gross tax on the oil commodities handled by them. The
little fellow who owns no oil wells or refineries is forced to pay a two
per cent gross tax. As a result of this law operating in the interest of
the big companies, the small operator is squeezed out of business, and
those owned by the big concerns control the markets. A law that permits
a thing of this kind is fundamentally wrong.
PIPE LINE COMPANIES.
With one exception the principal owners of pipe lines in Texas refuse
to make reports required by statute. Except for a few small concerns,
all refuse to pay the tax imposed. The contention is that the statute
is unconstitutional. Were it not for the issue raised it is estimated
that the revenue coming to the State under this provision of the law
would approximate $2,000,000 each year.
Pipe line companies in the nature of their calling are common carriers.
In addition to transporting oil, they buy and store it. They
earn substantial income upon capital,far in excess of the value of their
physical properties. The tax assessed is a privilege or occupation tax
equal to two per cent of its gross receipts if such line is wholly within
the State; if partly within and partly without the State, then in such
proportion of its gross receipts as the length of the line within the
State bears to that of the entire line. While not surrendering any
rights accruing to the State under the provisions of the law now upon
the statute books, it is altogether probable that both the State's and
the operating companies' interest would be better defined by placing
such activities under the operation of Chapter 4, T'itle 126, Revised
Civil Statutes; the Intangible Asset Law. In this manner their income
may be capitalized and a fair valuation for taxing purposes
reached.
INHERITANCE TAX LAW.
Our Inheritance Tax Law should be re-drawn, its scope widened, and
its administration placed under State authority. In California the
revenue arising to the State from taxes upon inherited property for
the year ending June 30, 1920, amounted to $2,678,158 and for the
year ending June 30, 1921, approximately $7,000,000. In Massachusetts
there was collected for the year 1921, under its legacy and suc