Texas Attorney General Opinion: V-1353 Page: 2 of 8
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Hon, Robert S. Calvert, Page 2 (V-1353)
In your first question you ask if the opinions of this
office construing Article 7060a are still in effect in view of the
decision of the Court of Civil Appeals in Western Co. v. Sheppard,
181 S.W.2d 850 (Tex. Civ. App. 1944, error ref_),
The plaintiffs in the Western Company case sued to
recover taxes which had been paid under protest on receipts from
shooting and acidizing oil and gas wells. The plaintiff contended
that various items of expense incurred in performing such serv-
ices were deductible from the gross receipts before computing
the tax. In this connection, the Court said:
"The words service and duty are words of com-
mon usage and generally well understood. The fact
that their application to a particular set of facts or a
particular occupation may be somewhat difficult does
not render the language of the Act indefinite or uncera
tain. Either the tax was intended to apply to the gross
receipts of the entire process of shooting or acidizing
wells, including the costs of materials.; or it was in-
tended to be limited to the gro-s receipts from the
services performed in the actual acii~ing or shooting
of the well, exclusive of the cost of the acid or explo-
sives used in such processes. It must be presumed
that the Legislature, when it passed the act, was famil-
iar with the manner in which such business was con-
ducted,. The record discloses that in the acidizing
process large quantities of acid are used, the amounts
and mixtures dependent upon the character and thick-
ness of the oil bearing strata, and that the appellants
so engaged were more interested in the sale of the acid
than in placing it in the well. There are thus involved
in the business of such appellants two factors,--one a
sale of the acid; and the other a service of placing same
in the well in such manner, by the use of their own
equipment, skill, etc., as to accomplish the desired re-
sult. The major portion of the gross receipts for the
overall undertaking was for the materials furnished
and ase4 and the charge for 'servicing' the well with
such materials constituted only a minor portion of the
total aggregate or gross charge, though the two items
were not specifically segregated in such overall or
gross charge, If the Legislture, cognizant of these
matters, had intended to levy the tax both on the c6st
of the materials used in performing such service and
on the service perfo~eed in acidlaing the well, it could
easily have so provided. Since, however, the lan~gae
used emphasizes the term service in connection with
the shooting or acidizing process, an item separable
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Texas. Attorney-General's Office. Texas Attorney General Opinion: V-1353, text, November 20, 1951; (https://texashistory.unt.edu/ark:/67531/metapth266171/m1/2/: accessed April 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.