The Quarterly of the Texas State Historical Association, Volume 14, July 1910 - April, 1911 Page: 9
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State Finances of Texas During the Civil War.
1863, those engaged in the sale of merchandise were subject to a
tax of 50 cents on each $100 proceeds of sales, and merchandise
was subject to no other state taxation. This was known as the
"merchandise tax." Assessors and collectors were required to call
once in every three months and get returns of sales under oath.
The act of November 15, 1864, replaced the graded liquors income
tax by one that levied simply 5 per cent on gross sales, and modi-
fied and extended the taxation of gross receipts. The several oc-
cupations and professions taxed were classified and different fixed
charges and percentage rates applied. Wholesale merchants were
subject to a tax of $300 and 1 per cent on gross receipts; retail mer-
chants, druggists, and auctioneers, $100 and 1 per cent. Those
keeping a billiard hall or nine or ten pin alley, doing a storage busi-
ness, and cotton compressing and insurance companies, were subject
to a tax of $100 and 2 per cent of gross receipts. Railroad com-
panies were subject to a tax of one-fourth of 1 per cent on their
gross receipts; but no special provision was made for the determi-
nation of the amount of gross receipts cr for the collection of the
Under the amended constitution of 1861, as under the original
of 1845, the legislature had the power to lay an income tax. A
beginning of income taxation was made in the act of January 13,
1862, which imposed on each person having a fixed annual salary,
whether as a public officer or by private contract, 25 cents on each
$100 of such salary over $500.1 The tax was self assessed and
no penalties were prescribed for failure of returns. This salary
tax was not re-enacted in the act of December 16, 1863, which ap-
plied the principle of income or receipts taxation to the merchan-
dise business, as it had been applied to the liquor business in the
act of December 15, 1864. It was not until November 15, 1864,
that the principle was extended, though it was yet so restricted as
to make the tax an occupation tax rather than an income tax in
the accepted sense of the term. Dentists and lawyers became sub-
ject to a tax of 2 p-er cent of the gross receipts from their profes-
sions, and presidents, directors, conductors, engineers, secretaries
'Gammel, Laws of Texas, V, 494.
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Texas State Historical Association. The Quarterly of the Texas State Historical Association, Volume 14, July 1910 - April, 1911, periodical, 1911; Austin, Texas. (texashistory.unt.edu/ark:/67531/metapth101054/m1/17/: accessed September 20, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Texas State Historical Association.