Citations
- 332 S.W.2d 389
Full opinion text
GRAY, Justice.
Appellant, Francitas Gas Company, filed this suit to recover taxes paid under protest, Art. 7057b, Vernon’s Ann.Civ.St., and has appealed from an adverse judgment.
Appellant owns and operates a natural gas cycling plant in Jackson County, Texas, through which plant it processes gas from gas wells for its liquid hydrocarbon content. For all purposes material to the question here presented it may be said that: the gas processed by appellant is from the Weed Sand in Jackson County; substantially all of the gas from said sand has been processed through appellant’s plant at least one time; after the removal of the liquid hydrocarbons the residue gas was returned, by cycling methods, to the Weed Sand, and all taxes due the State under the provisions of Art. 7047b, Vernon’s Ann.Civ. St., calculated on the basis of “(⅜) of the gross value of all liquids extracted, separated and saved” have been paid.
Appellant has withdrawn the residue gas supra from the Weed Sand and has sold it to the Aluminum Company of America. The tax alleged to be due on these sales was paid under protest and presents the question for decision. It is the liability of appellant for the tax and not its amount that is in controversy.
At the trial the parties stipulated, among others, the following facts:
“Plaintiff is a producer of the gas in the Francitas Cycling Unit for itself and for the owners of royalty and overriding royalty interests therein and is charged with the duty of reporting and paying the production taxes thereon to the State of Texas, and is likewise a proper party to maintain this suit.
" * * * Plaintiff did not sell the dry gas resulting from the cycling operations, and said gas was returned to the Weed Sand until it was subsequently withdrawn from said Sand and sold to the Aluminum Company of America within the State of Texas, said withdrawals for said purpose having begun on or about June, 1950, and having continued to the date of the trial hereof.
“ * * * for the purpose of this suit Plaintiff shall be considered the pro-dtxcer of all of said gas and liable for all the taxes thereon unless the taxes are not due under one or more of Plaintiff’s grounds of protest.”
The provisions of Art. 7047b, supra and its amendments prior to 1959 present the formulae for determining the question presented. The tax rate fixed by the above statute and its amendments has not remained the same however the parties have stipulated as to the amount of such taxes and in view of this stipulation the rate is not here material. For the purpose of determining whether the tax paid by appellant under protest is due we will refer to Art. 7047b, Acts 1945, 49th Leg., p. 423, Ch. 269, prior to its amendment in 1954 as the Act and to the 1954 amendment as the amendment. The Act in part provides:
“Tax on producers of natural gas.
“Section 1. (1) There is hereby levied an occupation tax on the business or occupation of producing gas within this State, computed as follows:
“A tax shall be paid by each producer on the amount of gas produced and saved within this State * * *
“In calculating the tax herein levied, there shall be excluded: (a) gas injected into the earth in this State, unless sold for such purpose; (b) gas produced from oil wells with oil and lawfully vented or flared; and, (c) gas used for lifting oil, unless sold for such purpose.
“(2) The market value of gas produced in this State shall-^e the value thereof at the mouth of the well; however, in case gas is sold for cásh only, the tax shall be computed on the producer’s gross cash receipts^ In all cases where the whole or a